Mortgage – Get Tax Transcripts Up Front

We have all heard about a friend or family members mortgage stalling just prior to closing.   There are a number of reasons this can happen.  Quite simply put, 90% of the time (or more) it is a mortgage loan officer’s operator error that causes the last-minute drama.  One of the most silent of all mortgage killers is the failure to order IRS/Tax Transcripts for someone using a mortgage to finance the purchase of their Arizona home or to refinance their existing mortgage to obtain a lower mortgage interest rate.

Ordering tax transcripts is vital to a successful mortgage experience.  There are a number of potential questions/hurdles that can come up once tax transcripts have been ordered and received by your Arizona mortgage lender.  Before we explore the potential pitfalls, lets back up and quickly visit the “why” behind tax transcripts in the mortgage world.

Why Does Your Mortgage Lender Need Tax Transcripts?

is is a great question.  First, lets hit the definition and explain what tax transcripts are.  Tax transcripts are a standardized report that is provided by the IRS to your loan officer.  This report outlines all of the verified/final data from a mortgage applicants Federal Tax return in a line by line/itemized format.  Your Arizona mortgage lender uses a form called a “4506-T” to request this information from the IRS.  Loan applicants often wonder if we need to order a tax return transcript with the IRS if they have provided us with their Federal tax returns already.  The answer – absolutely YES (if tax returns are required for loan approval).

Now on to why.  Mortgage lenders are now required to verify a home loan applicants income information with the IRS.  In the past when rules and regulations were a bit more scarce in the mortgage world, mortgage lenders were not required to order this information for every borrower.  After a bit of chaos in the Real Estate and Mortgage worlds the rules have changed.  More importantly the trust level of the investors that provide funds for new mortgages (Fannie Mae, Freddie Mac etc…) have related to the consumer providing accurate data has decreased.   After seeing folks creating false returns, pay stubs etc… we are now required to verify that we are approving clients based off of verified and factual income data.  Don’t take it personally!  Arizona mortgage lenders are required to run every loan application through the same tax return transcript process.

Phoenix mortgage lenders also need to verify different income related details that ultimately impact what income can be used to qualify a new home loan applicant for a new mortgage.

What Problems Can Arise From Delaying Tax Transcripts? 

The issues that can crop up due to an Arizona mortgage lender not ordering and reviewing transcripts on the front end are huge and very costly!   Here is a list of the top challenges that come from this subtle yet costly mistake:

1. Lender can miss expenses that must be deducted from borrowers income for qualification
2. Loan applicant may not have filed their taxes with the IRS yet (big problem)
3. Delays may pop up at the end if there are technical issues with IRS’s processing of the tax transcript order (this happens more often that you think)

The moral of this story is that it is critical that your Arizona mortgage lender orders your tax transcripts upfront and ahead of time to help you enjoy a smooth and surprise free mortgage experience.  Please let me know if I can help you.  You may also APPLY NOW.

By Jeremy House



  1. Well spoken~ no wonder you and your team are top in the country. I am so sorry these poor Buyers didn’t use you and your Awesome team! Thank you, Jeremy!!

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