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How to Avoid Delays in your Closing on a Home Loan, The Series Series Three: Income

By Frank Marta

Mortgage and Lending with Nuhome Mortgage 245813/835196

November 05, 2014 05:37 AM

In the previous two series, we mentioned how Credit and Assets could cause a delay in the closing of your Home Loan. If you haven’t read those two blogs I would highly recommend you do so, for they are very educational. In this series, we will be covering, income and how it could affect your loan. Please keep in mind that every scenario is different and I highly recommend that you speak to a professional Loan Officer about your specific scenario.

Top 8 things that could delay your loan process:

1. Not filing your Tax Returns.

2. Not having 2 years of Tax Returns.

3. Not providing all pages to your Tax Returns. (Both Years)

4. Not having the w2’s/1099s for each Tax Return.

5. Having too many write offs in which lowers your income.

6. When you transition from 1099’s to w2’s.

7. Having 2106 expenses that do not favor you.

Q. & A.

Q1. What if I transition from ITIN Tax Returns to a social security number?

A1.Your Tax Returns would have to be amended for the past two years. This would take time and delay your loan process from 8-16 weeks depending on how fast you could get your taxes amended and if they become verifiable with the IRS.

Q2. What happens if I owe the IRS?

A2. You would either have pay in full or establish a payment plan with the IRS. You must be able to prove that you have paid the IRS in full or that you have arranged a payment plan. Depending on how you pay, this particular situation could slow down you loan process anywhere from 2-4 weeks.

Q3. What if I filed my Tax Returns late?

A3. If you filed your Tax Returns late, your transcripts are not verifiable yet. This could delay your loan anywhere from 4-6 weeks.

What Is NOT Allowed:

1. Not having a two year work history is unacceptable to the lenders. A gap of employment is acceptable for up to 6 months only when there is a good excuse. Please keep in mind that if you have not had two years of employment but you have been a full time student for those years that is acceptable. All we would need is your transcripts and proof that you are currently employed in the field in which you graduated on. Please be aware that you may have more than one employer for the past two years but your employment must be in the same line of work.

2. The rule of thumb is, if you go from W2 to 1099. You must have two years of Tax Returns as a 1099, if you just transition, you must wait until you have two years filing Tax Returns.

3. If you are self-employed, receive commission and bonuses as an income, we can only account for that income if you have been receiving this additional income for more than 24 months.

If you would like to be informed about more reasons on how to overcome any delays please email us or contact us by phone. You should always call to consult with a professional loan officer for your personal scenario.