Tax Return Filing for Home Loan Approval

File Taxes On Time for Approval

Filing your tax returns early can help with your Arizona mortgage approval.

Have you filed your Federal Income taxes yet?  The date an Arizona mortgage applicant files their taxes can be the difference between loan approval and loan denial.

Using Your Higher Tax Return Income

For self-employed or commissioned loan applicants enjoying higher income than in recent years, filing your tax return(s) may make all the difference.  In order for your recent higher income to count with your mortgage lender self-employed or commissioned borrowers must have filed their Federal Income tax returns.

The key is making sure your Tax Return has been processed by the IRS.  IRS processing a return and a you submitting your return are two different things.   Most importantly, one cannot happen without the other.

The IRS needs you to submit your Tax Return before it can process it.  As a result, submitting your tax return is step 1.  Once the IRS receives your return they begin to process it.  Processing a Tax Return means an IRS agent reviews your return for accuracy.  As you may have guessed – processing a Federal Tax Return takes time.

Just how long can it take?   The IRS takes up to 6 weeks to process your Tax Return.  Therefore, it is imperative you file your Return on time when trying to apply for a new home loan.   Mortgage lenders are not the most trusting bunch these days.  Typically, they do not allow self-employed or commissioned borrowers to use new income until the IRS has processed the return.

How to Avoid Surprises at Closing

Tax filing dates should be addressed during the up front application process with a loan officer.  An Arizona mortgage applicant should be asked when they filed they taxes when the application takes place at a time where the loan applicants closing will take place after the 15th of April (technically if the loan applicant’s application will be submitted after the 15th of April).

By Jeremy House

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