How Can I Qualify For W2 Only Income Mortgages

Homebuyers who have not done their income tax returns or have substantial unreimbursed business expenses can qualify for W2 income-only mortgages.  Gustan Cho Associates does not require income tax returns from borrowers if the Automated Underwriting System does not require two years tax returns do not condition for it.

Gustan Cho Associates offers W2 Only Income Mortgages on the following loan programs:

  • FHA Loans
  • VA Loans
  • Conventional Loans (Fannie Mae Only)

Borrowers do not have to turn in their income tax returns. We only need two years of W2s. We will only do a W2 income verification with the internal revenue service.

Loan Programs Offering W2 Only Income Mortgages

Borrowers can now qualify for W2 Only Income Mortgages with Gustan Cho Associates. Borrowers do not need income tax transcripts (1040’s) if they are applying for FHA, VA, and Conventional Loans if they are a W2 Income Employee.

Can I Qualify For W2 Income Only Mortgages?

As long as you are a W2 wage earner and do not have any other businesses and/or 1099 income, you are can qualify for W2 income only mortgages.

Here are the W2 Income Mortgages Guidelines:

  • Do not need tax transcripts (1040’s) for FHA, VA loans, and Conventional Loans if W-2 employee and AUS does not require it
  • FHA, VA, and Conventional Loans no longer require full income tax transcripts (4506-T) to be done if they are a W-2 employee
  • This rule is not effective and  doesn’t apply if borrowers are self-employed or more than 25% of the borrower’s income is commissioned and/or self-employment income

Borrowers with rental income from multiple rental properties do not qualify for W2 Income Mortgage.

How Long Do You Need W2 Income To Be Eligible For W2 Income Only Mortgages?

Qualifying W2 Mortgages is advantageous for borrowers who are purchasing a home or refinancing their current home where their income tax returns show losses due to un-reimbursed employee expenses which are shown on IRS TAX FORM 2106. Advantages of qualifying of these mortgages are also for borrowers who have self-employment losses on their Schedule C of their income tax returns and which this loss is not their primary source of income.

Mortgage Lenders That Do Not Require Tax Returns For W2 Income Wage Earners

Gustan Cho Associates does not require federal income tax returns for W2 income wage earners. It does not matter whether or not you filed taxes or declared substantial unreimbursed business expenses.

Borrowers who have un-reimbursed employee expenses on their income tax returns are workers who need to purchase their own work uniforms. Examples of such employees are the following:

  • Police Officers
  • Fire Fighters
  • Mechanics
  • Tradesman
  • Nurses
  • Doctors
  • Dentists
  • Pharmacists
  • Bus drivers
  • Truck drivers
  • Other workers who need to purchase their uniforms for work

No Tax Returns Required For W2 Income Wage Earners On FHA, VA, Conventional Loans

With W2 Income Mortgages, income tax returns are not required. If borrowers did not file their income taxes, that is alright with this loan program. Only the W2 income transcripts will be verified from the Internal Revenue Service:

Borrowers who also need to purchase tools and equipment for their work normally have un-reimbursed employee expenses.

Typical Jobs For W2 Income Mortgages On FHA, VA, Conforming Loans

Police officers need to purchase their guns and ammunition and work gear

Examples are the following:

  • Police officers need to purchase their guns and ammunition and work gear
  • Plumbers and electricians need to purchase tools and equipment for work
  • Mechanics need to purchase tools and equipment for work
  • This will also help borrowers who have part-time self-employment income show losses

In this new tax mortgage rule, the lender only needs to verify and confirm your W2 verification with the IRS.

W2 Income Only Mortgage Options

Here are how you can qualify for W2 Only Income Home Loans:

  • HUD Allows W2 Only Income Loans
  • VA Allows W2 Only Income Loans
  • Fannie Mae Allows W2 Only Income Loans
  • Freddie Mac does not allow W2 Only Income Loans

W2 Only Income Mortgages gives borrowers who have a lot of unreimbursed expenses the opportunity to qualify for a mortgage loan. However, there are rules and restrictions on how borrowers can qualify for W2 Only Income Mortgages. Borrowers cannot have a full-time self-employed business. Borrowers cannot own 25% or more of a business that you own even though you are a W2 wage earner from their own business. Borrowers cannot have rental income. Gustan Cho Associates are experts in W2 Only Mortgages on FHA, VA, and Conventional Mortgages.

Qualifying For W2 Only Mortgages With A Lender With No Overlays

Borrowers who want to know more about our W2 Income Mortgages and see if they can qualify, please contact Gustan Cho at 262-716-8151 or text for a faster response. Borrowers can also email us at [email protected] We are available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates Mortgage Group is a 5-star national mortgage lender with no mortgage overlays on government and conventional loans. We offer non-QM loans where there is no waiting period after foreclosure, short sale, deed in lieu of foreclosure. Gustan Cho Associates also offers bank statement mortgage loans for self-employed borrowers.

How Do The W2 Income Only Mortgages With No Tax Returns Work?

Qualified income is one of the most important factors when lenders qualify borrowers. All income used as qualified income needs to be verified. Lenders want to make sure borrowers have the ability to repay their new mortgage payments. The history of qualified income is important and a good indicator of future income. Every lender has its own method of the way they calculating qualified income. Most lenders will require two years of income tax returns, two years W2s, and past 30 days paycheck stubs.

The Mortgage Process For W2 Income Only Loans

At Gustan Cho Associates we do things differently. We try to streamline documents and make the mortgage process easier. For all W2 wage earners who get a base salary and overtime income, you do not need to provide two years of income tax returns. The only income documents we go by is W2 transcript processing. This holds true only if you are a W2 salaried employee. If you have commission and/or bonus income that is less than 25% of your base salaried income, it can only be used and no income tax returns will be required.

How Do Mortgage Underwriters Process W2 Income Only Borrowers

Income is one of the most important factors when it comes to qualifying for residential mortgage loans.

Income is one of the most important factors when it comes to qualifying for residential mortgage loans. In the past, all government and conventional loans programs required two years of tax returns. However, if mortgage borrowers only have W2 income jobs, most of the time’s income tax returns are not required when qualifying for FHA, VA, USDA, and Conventional loans:

  • There are many instances where Automated Underwriting System Approval (AUS) does not require income tax returns from W2 Wage Earners
  • Mortgage Lenders with no mortgage overlays only go off Automated Underwriting System Approval (AUS)
  • If the automated findings do not require two years of income tax returns, Gustan Cho Associates will not require it
  • W2 income wage earners can now qualify for W-2 Income With No Tax Returns required on FHA, VA, USDA, and Conventional Loans
  • Only two years of W2s are required

How Do I Start The W-2 Income Only Home Loans With No Tax Returns Mortgage Process?

The past days of no income, no documentation loans have long been gone. Cash income does not count in the mortgage lending world. All income needs to be sourced and documented:

  • For those mortgage loan applicants who are self-employed or are 1099 wage earners, two years of tax returns are required
  • For those W-2 income wage earners, most 30 days of paycheck stubs are required and most mortgage lenders want to see two years of W-2s as well as tax returns
  • We have just launched a new residential mortgage loan product for W2 wage earners
  • It is called W-2 Income Only Home Loans where only two years W-2s are required and the past two years tax returns are no longer required
  • W-2 Income Only Home Loans is available for FHA loans, VA loans, and Conventional loans
  • This is not offered by all lenders
  • Gustan Cho Associates offers the W-2 Income Mortgages for FHA, VA, and Conventional loans.

To qualify for W-2 Income Home Loans With No Tax Returns with FHA, VA, and Conventional Loans, borrowers need to be W-2 Income wage earners. 1099 or self-employed borrowers do not qualify.

Why Are 2 Years Tax Returns Required?

Even though borrowers are W-2 income wage earners and the Automated Underwriting System does not condition for two years income tax returns many lenders will ask for two-year tax returns:

  • The reason being is due to tax deductions from income taxes
  • Write-offs on tax returns offset monthly gross income
  • This reduction of gross income will often times hurt borrowers when it comes to debt to income ratios calculations
  • Due to the income tax deductions, many cannot qualify for FHA, VA, Conventional Loans
  • For example, many police officers and firefighters get uniform allowances
  • Many of them do write off expenses for uniforms, weapons, equipment, and other job-related write-offs on their income tax returns

Unfortunately, these write off will bite them in the rear end when it comes to qualifying for home loans because some of these write-offs can add to several thousands of dollars.

The Impact of Unreimbursed Business Expenses on Qualified Income For a Mortgage

Many business owners, independent contractors, real estate investors, and 1099 wage earners have the benefit to use substantial unreimbursed business expenses and write off from their gross income on their tax returns. Unreimbursed business expenses are a great tool for self-employed people to take advantage of minimizing paying taxes. However, it is often a barrier when it comes to qualifying for a mortgage. These write-offs are then subtracted from gross monthly income where in many cases exceeds the maximum debt to income ratios allowed:

  • Many borrowers try to amend their tax returns where they want to reverse the write-off
  • However, amending tax returns requires a six month waiting period before the amended tax returns can be used to qualify for a mortgage
  • With the new W-2 Income Only Home Loans, no tax returns are required and W2 wage earners can now qualify for home loans

W2 income wage earners who have rental properties will not qualify for W-2 Income Only Home Loans.

W-2 Income Only Mortgage Lenders With No Overlays

Gustan Cho Associates is a national mortgage company with no overlays on government and conventional loans. Gustan Cho Associates Mortgage Group offers W-2 Income Only Home Loans with no income tax returns required on FHA, VA, USDA, and Conventional Loans. Borrowers who need to qualify for FHA, VA, USDA, Conventional Loans with no income tax returns, please contact us Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

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