Many people are under the assumption that they need two years taxes to qualify for a mortage loan. In some instances this certainly is the case however there are situations that only require one year! This is critical in today's economy especially with 2011 wrapping up in a few months. Let me explain this further.
In your typical scenario an underwriter would take an average of the last two years taxes for income qualifying purposes. If a person had a poor 2009 but a much better 2010, the average still might not be enough to qualify for the loan amount they want. However if the loan gets ran through the underwriting system (DO or DU) and receives an Approved/ Eligible many lenders will only require income documentation this approval asks for. Many times this is only one years taxes! Not all loan types apply, not all lenders will honor this approval (some have what's called lender overlays where they require additional documents), and not all borrowers will get the one year tax return approval. However some will!
With 2011 coming to an end this can make a big difference for people getting prepared to file their taxes in a few months. This will mean the difference between some people being unable to buy and others in the same situation who then can. Contact your local mortgage broker or lender for further information on how this works. We have done them in the past, present, and will continue to in the future so long as the programs are available. This might be another way to seperate yourself from the pack with additional mortage loan knownledge. Hope this helps someone out there. Have a good day!
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