New Guidelines, What You Need To Know About 2010 Tax Returns

It's that time again and individuals and business owners are compiling their reports, stubs and records for their 2010 IRS Federal and State tax Returns. For loan officers, there is a very real need to understand the import of tax return on the mortgage loan process for your clients, because the timetable can affect their ability to obtain the still-low interest rates available.

The income verification step of the mortgage loan process requires a tax return, but with the delayed date of midnight, April 18, 2011 for long-form filing, returns will be processed even later this year. The second delay is due to people or businesses who need to itemize deductions like mortgage interest, medical expenses or property taxes could not file until mid-February of this year. The 45-day delay to their filing date will further push back the processing of 1040's for the 2010 tax year.

Consumers interested in purchasing or refinancing a home this year need to understand the import of having the documentation required by a mortgage lender to provide income verification.  If tax returns are delayed in being processed, there are a few alternatives to the original return copy that a mortgage loan officer could accept in their stead. (Loan officers; keep in mind that you very well may need to consider these options to maintain your closing rates this year)

• A certified copy of your tax return from an accountant.
• 2010 Bank account statements
• A transcript of your tax return from the IRS
• (For businesses and business owners) A 2010 Profit and Loss Statement

Now is the time to file if you are considering applying for a mortgage loan, and lenders are ready and waiting for you to come in and begin the process. If your lender requires a copy of your tax return in lieu of the above options, you can call the IRS at 1-800-908-9946 and request it verbally with your SSN or go online to http://www.irs.gov/taxtopics/c156.html.

Live in Connecticut and looking to purchase a home or refinance your existing mortgage loan? Give me a call to get the ball rolling on your mortgage lending process.