Everyone has the problem where a self employed borrower hasn't shown enough income in order to qualify. This is the time of year when they prepare their tax returns for the previous year. Everyone is gathering their receipts and deductions to try and pay as little income tax as allowed by the federal government. The more you pull out of Uncle Sam's pocket, the less house you can afford. Since lenders use a two year average of income to qualify a self-employed borrower, careful consideration must be used in doing 2012's return. If the income is high enough, a buyer can boost their buying power greatly.
The problem lies in what is know as Form 4506. Because of many cases of loan fraud having occurred in the past, where buyers have given fraudulent 1040s to their lender far different than the actual one they filed with the IRS, lenders won't allow buyers to close on their homes until they receive proof of income from the IRS. This form when sent to the IRS, verifies the 1040 transcript matches the one given to the lender. It can take as long as 8 weeks by the IRS to verify a return has been filed by a borrower. This has delayed many closings, and in some cases causing hardships with families. I have three lenders who don't send this form to the IRS; therefore, I can close the loan with a newly filed tax return. No delays means happy customers, and happy realtors.
Call me with your next mortgage loan.
Andy Williams
President
Abacus Regional Mortgage
484 695 5972
NMLS # 118317
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