W2 Income Mortgages With No Tax Returns For Home Buyers


W2 Income Mortgages With No Tax Returns For Home Buyers

This BLOG On W2 Income Mortgages With No Tax Returns For Home Buyers Was Written By Michael Gracz of Gustan Cho Associates Mortgage Group

All mortgage lenders need to follow agency lending guidelines in order for them to get their mortgages they fund insurable and be able to sell them on the secondary market.

  • More importantly, lenders want to feel as confident as possible that borrowers are able to afford to repay their mortgage and they will not default on their new home loan
  • Most borrowers are under the belief that income tax returns are required when applying for home loans
  • This belief holds true for self employed home buyers but more and more lenders are not requiring income tax returns for W2 Only Wage Earners
  • Before going about amending tax returns to increase adjusted gross income before applying for mortgage, consult with loan officer
  • Gustan Cho Associates Mortgage Group does not require income tax returns if Automated Underwriting System (AUS) does not require it
  • It is now possible for W2 wage earners to qualify for W2 Income Mortgages With No Tax Returns required
  • Many police officers, fire fighters, and medical personnel have a lot of unreimbursed expenses declared on their income taxes where it affects their adjusted gross income
  • With our W2 Income Mortgages With No Tax Returns required loan program, home buyers can qualify for government and conventional loans with no tax returns

Why Income Tax Returns Are Required By Lenders

Lenders need to meet agency mortgage guidelines on government and conventional loans.

  • However, lenders are very careful on making sure that all of their clients have the ability to repay their new mortgages
  • Lenders also need to make sure that lenders do not have a hard time in meeting their mortgage obligations every month
  • All lenders sell their loans after they fund and the secondary market will not purchase loans that are not performing
  • Lenders want to check borrowers income for consistency and make sure there is no mortgage fraud
  • Income Tax Returns and IRS verification validates borrowers W2 income, 1099 income, other income, adjusted income, and write offs tax filers filed

What Is IRS FORM 4506-T

Borrowers will be required to complete and sign IRS FORM 4506-T as part of their mortgage docs.

  • IRS Form 4506-T provides the mortgage lender authority to represent borrowers in receiving copy of borrowers IRS transcripts
  • The 4506-T Form from the IRS gives lenders all financial documentation including W2s, 1099s, and other tax forms and documents by the IRS
  • Mortgage Underwriters will cross reference and cross check borrowers income tax returns with the IRS transcripts and this is how they validate income
  • When lenders run Automated Underwriting System (AUS). there are many times AUS will not require federal income tax returns
  • Mortgages With No Tax Returns are becoming more and more common with government and conventional loans
  • If AUS does not condition tax returns, mortgage underwriters do not want loan officers to provide income tax returns
  • W2 Income Wage earners do not normally have to provide income tax returns
  • Self employed borrowers or borrowers with income properties DO have to provide income tax returns

Type Of Wage Earners Determine Tax Return Requirements

Self employed borrowers and 1099 wage earners are required to provide lenders two years income tax returns.

  • Mortgage Underwriters will also verify the income tax returns of borrowers with the Internal Revenue Service using IRS Form 4506-T
  • Borrowers utilizing many income deductions from their tax returns will have a difficult time qualifying for mortgage
  • This is due to tax filers gross income being decreased by tax filers deductions
  • This lowers the amount of money borrowers can qualify for a loan

Michael Gracz of Gustan Cho Associates Mortgage Group offers Bank Statement Mortgage Loans For Self Employed Borrowers where no tax returns are required.

  • Self employed borrowers can qualify without providing income tax returns. Income is derived by 24 months personal or business bank statements
  • Deposits over 24 months is averaged and that is how monthly gross income is derived
  • If borrowers provide 24 months personal bank statements, 24 months of bank deposits are averaged
  • If borrowers provides 24 months business bank statements, then 50% of deposits are averaged over 24 months
  • Needs to be the same bank
  • Cannot have overdrafts
  • Verification of rent and/or verification of mortgage is required
  • Withdrawals does not count
  • There is no loan limits on bank statement mortgage loans
  • There is no private mortgage insurance required on bank statement mortgages
  • 10% to 20% down payment is required
  • Mortgage rates depends on borrowers credit scores and down payment
  • The more down payment, the less the mortgage interest rates
  • The higher credit scores, the lower the interest rates

About The Author Michael Gracz

Michael Gracz,  is a veteran mortgage professional and also a contributing editor for Gustan Cho Associates Mortgage News.

  • Mike Gracz is also an expert on GCA Mortgage Forum and Business Development Manager for Gustan Cho Associates Mortgage Group
  • One of Michael Gracz’s main role is educating police officers, fire fighters, and other first responders throughout the country in real estate investments and credit

Mike works closely with all loan officers at Gustan Cho Associates Mortgage Group in setting up seminars with real estate agents and at arranged group conferences.

Topics includes the following:

  • qualifying for home loans after bankruptcy
  • foreclosure
  • short sale
  • qualifying for home loans with less than perfect credit and high debt to income ratios

Michael Gracz resume includes working as a loan officer as contributing editor for GCA Mortgage Group. Mike Gracz is a writer for Gustan Cho Associates Mortgage & Real Estate Information Center and guest speaker at many functions arranged by our Team. Every American’s dream is to own a home. Crime and Safety is every homeowners concerns and Mike is an expert in giving basic tips in all areas of home ownership. Michael Gracz is a natural born leader and his number one goal in life is helping others and his true passion is helping first time home buyers make their dream of home ownership become a reality.

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