Buying your first home can be one of the most exciting experiences of your adult life. However that excitement comes with tons of stress. Before even attempting to get financing to guy a home you need to get all your ducks in a row. This may seem like a no brainer, but one detail that people often overlook is your tax return. Tax return issues can cause close delays and in some cases, loan denials.
Gearing up for home buying is no easy task. However if you do your research and use the right resources, you can go into it fully prepared. Preparation will greatly reduce your stress level though the process. It will also reduce the chances of closing delays and loan denials.
Tax Return Issues
There are a few reasons why your tax return would affect a loan request. Mistakes made when filing taxes can cause big problems in mortgage lending. In some cases people don’t realise that they’re committing fraud in their tax return. Here is a list of reasons why your tax return issues would affect your mortgage request.
Mistakes or Fraudulent Tax Filing
If you are currently having problems with your tax return or have been accused of tax fraud, you’re going to want to get that sorted out before requesting financing. The law requires lenders to look into any tax issues you’ve dealt with, past or present. If you’re behind on your taxes, or never filed for a past year, lenders will find out. In that case your sale will be either delayed or denied.
If you have been a victim of identity theft, your loan request can be delayed. In recent years identity thieves have been known to steal social security numbers, gaining access to your tax return and refund. When this happens, the IRS may refuse to provide tax transcripts to the lender, which will cause a delay in your sale. This one is especially frustrating and goes to show you just how much damage an identity thief can do.
These are just a couple reasons why your tax return issues can hinder your ability to close a sale on a home. The best advise that we can give is to over prepare, and give your lender all of your tax documentation right from the start. Once you have prepared yourself, you can begin the application process for pre approval and be on your way to buying a home!