Yes, you can get a mortgage by providing not two, but one year’s federal income tax returns! Crazy enough? Read on for the latest and best mortgage tip to come along in a long time……
Traditionally, mortgage lenders have required two years federal income tax returns in securing a mortgage for purchasing or refinancing real estate. To originate a mortgage loan a mortgage lender will require tax returns and w2’s for the last two years as well as sufficient assets. Next the lender runs your loan application through an automated underwriting. Fannie Mae’s automated underwriting system is called Desktop Underwriter (DU for short). Freddie Mac’s automated underwriting system is Loan Prospector (LP for short). If the results of automated underwriting ask for lite documentation such as a year of tax returns, you’re golden. Such findings makes mortgage paperwork process not only easier, but faster for you completing a refinance or buying a home.
Here’s what one year’s tax returns means for loan qualifying!
Not all scenarios work for light documentation. Here are some examples that may fly:
- Changing from being being self employed to w2
- Only being self employed for the last year
- Being a w2 wager earner
- Moving bonus or commission income
(Note: if you are self employed and had a bad year, not all bets are off for qualifying. For a lender to determine how you qualify they will need an application which includes pulling credit and the normal financials. A good lender can work the math backwards.)
Mortgage Tip: One years tax returns
Let me explain a quick list of benefits to just one year’s returns:
- Speed. Providing your most recent W-2s and most recent tax returns make the process faster.
- Diversity. This benefit applies to all mortgage loans including:
- FHA Loans
- Making Homes Affordable Refinance Program
- USDA Loans
- Va Loans
- Conventional Loans
- Home Path Loans
Each mortgage loan program requires an automated underwriting loan approval, either by DU or LP. It doesn’t matter what loan program you are trying to qualify for. The automated underwriting model findings hold the same for each.
Remember most mortgage lenders require two years of federal income tax returns.
Remember most mortgage lenders require two years of federal income tax returns. Just because the automated underwriting model gives us the ability to originate loan with one years of federal income tax returns, that doesn’t necessarily mean the all mortgage lenders follow suit. Ask your mortgage lender up front how your mortgage loan is originated, specifically, ask them the following questions:
- How does your mortgage company qualify me for a mortgage loan?
- Can my my mortgage loan be funded by only providing one years of tax returns and supporting W-2s?
- How do you determine my income?
Make sure as informed consumer to ask these questions of the mortgage lender you selected to handle your purchase or refinance loan.
Mortgage tip: You want to be applying with the lender knows income, and automated underwriting. Not all lenders are created equal.”
Gain an advantage of working with a sharp lender who can qualify you with tough income.
See 30 year mortgage rates by getting a complementary mortgage rate quote. Qualify for a mortgage loan online today. The best mortgage tip we can offer is one years of tax returns for getting a mortgage is not out of the question.