Why Mortgage Lenders Want to See Tax Returns

If you are shopping for a home mortgage be prepared to hand over the real
proof of taxable income.  Lenders used to rarely require borrowers to
provide copies of federal tax returns.  Today, lenders often ask borrowers
to turn over their entire tax returns.

Most people think that that can just bring in the first few pages of their
tax return.  What lenders really need are id the full tax return and all of
the schedules. The reason being a full income layout is throughout the whole
document.  Not just the first few pages.

Borrowers are also required to sign a Form 4506-T, which allows the lender
to retrieve a tax transcript from the Internal Revenue Service.  The lenders
used this compare the W-2s to his or her reported income.

All aspects of the borrowers tax returns with be examined. Lenders do not
only look at reported income, but but also other items such as un-reimbursed
employee business expenses, rental property income, business losses,
depreciation expenses, capital gains & too many tax deductions.

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