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Read your tax return, don't just let someone to put some numbers for you and walk away.

By
Real Estate Agent with RE/MAX REAL ESTATE TODAY, Executive Broker 901-488-9590

April 15, I know, it is not a very favorable day for many people, it is TAX time.  You say, "What are you talking about?  It is the end of June now!"  Oh, I know that, I am about to tell you how your tax return can haunt you when you plan to buy a new home.

Okay, you gathered up all the receipts and expenses breakdown and get ready to file your income tax, everything looks good, and it is ready to go. 

I think most of us are not a big fan of paying taxes when the time comes, it just hurts, ouch, I know.  But do you know that piece of paper has the power over your home loan application, even closing?  Let me explain:

**You make X amount of dollar each year, you have decent credit, pay stub, check stub, tax return, looks like you can go ahead to apply for a home loan.

**You start the home buying process before 4/15, so you don't have your tax return of the current year, no big deal, you can bring it back to the lender after you filed.

**You are now pre-approved to certain amount subject to all the needed documents.

**You are very happy now and get your real estate agent to go out for house hunting.  Bingo,you found the one you like, put an offer, it is even got accepted right off the back.  Hmmm, it is looking so good.

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Let's go back a little bit...........

How much deductible did you file on your tax return?  Are you happy that you have money coming back and not to worry about paying any tax this year?  I know it sounds very good.  I know it is.  Think about it:

**If it shows you don't have to pay anything after all the deductions, that means it shows you don't make that much as you say you make X amount of dollar, right?  What does it mean to a lender?

**It is very simple, that means you make less.  And how is it going to affect your loan?

**Big time!   It may mean you can't afford to buy the house you want, the one that you have the offer accepted?

If you are planning to buy a house, pay attention to your tax return, if it shows you make nothing after all the deductible, that means you can't buy, do you get the point here?  Because you make nothing, so how can you buy?  Don't let just anyone to do your tax, you need to know what they file for you.  It is your money, pay high alert!

 

 

 

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Serving Marion, West Memphis, Crawfordsville, Hughes, Horseshoe Lake, and surrounding areas.  If you are planning to sell or buy, please feel free to give me a call, find out if I am the right agent for you.

 

 

 

Rita Fong, REALTOR®

RE/MAX Real Estate Today

1813 Highway 77  Marion, Ark. 72364

cell:901-488-9590

office:870-735-4663

fax:870-735-4668

http://www.ritafong.remaxarkansas.com

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Comments (4)

Lina Robertson
AMAX Real Estate - Springfield, MO
REALTOR® Serving Springfield, Nixa and Ozark, MO

Great advice, Rita!  It's a double-edged sword, and most people don't realize it until they find out the hard way....by getting bit.  Thanks for sharing!

Jun 29, 2010 04:03 PM
Rita Fong
RE/MAX REAL ESTATE TODAY, Executive Broker 901-488-9590 - Marion, AR
Realtor - Marion Arkansas Homes for Sale

Lina, we just learn as we grow, no kidding.  I have one client almost couldn't close because his tax preparer made up a business for him to write off some deductible.  Luckily we closed that one.    

Jun 29, 2010 06:05 PM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Yep, these tax returns are an important part of the loan process.  They need to be nurtured very carefully.

Jun 29, 2010 06:37 PM
Rita Fong
RE/MAX REAL ESTATE TODAY, Executive Broker 901-488-9590 - Marion, AR
Realtor - Marion Arkansas Homes for Sale

Jane, many people just don't realize how important it is, they are just glad to know they don't have to pay tax, but it will come back to haunt them when they need it.

Jun 29, 2010 06:48 PM