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Old 03-29-2015, 12:22 AM
 
3 posts, read 3,801 times
Reputation: 11

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I知 trying to find out how much mortgage I can get, but I need to know exactly how lenders look at income; this is my situation:

Annual Gross Income on W-2: $29,000

Available cash for down payment: $7,000 (I知 planning to apply for a FHA loan, so I can reach the 3.5% requirement on a mortgage up to $200,000)

Debt to Income Ratio: 0% (no other loans and all my credit card have $0 balance)

FICO Score: 777

Now the tricky part: I知 getting a tax refund of $12,000 a year. This is a steady amount (last 3 years), it is verifiable through my 1040, and I知 not expecting any event in the near future that could alter this annual amount, so I guess it is pretty safe to assume that it will continue in the future.

In real life this annual refund is a very important part of my income. My question is: will the lenders count this tax refund as income, or they only take the W-2?
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Old 03-29-2015, 05:21 AM
 
Location: Ozark Mountains Arkansas
1,791 posts, read 1,103,376 times
Reputation: 3565
That's a good question and while I don't know if underwriters consider it a part of your income, I can tell you the IRS does seem to consider it income since they tax it the following year.

I can't figure out how you get a $12,000 refund on a yearly income of $29,000????
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Old 03-29-2015, 05:47 AM
 
Location: Bloomington IN
5,863 posts, read 7,085,877 times
Reputation: 14078
If you're getting a $12,000 refund yearly you need to look at your tax deductions or you have some other assets or a situation not mentioned.

No matter what your credit score is, I can't imagine any lender giving you a loan for $200,000 with that income.
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Old 03-29-2015, 06:05 AM
 
Location: Florida
4,224 posts, read 3,519,808 times
Reputation: 9383
Why in the world are you giving the IRS an interest free loan of $12k of your dollars?????????

Terrible accounting, dreadful idea.
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Old 03-29-2015, 06:54 AM
 
4,480 posts, read 7,937,629 times
Reputation: 6404
Its not what you think. I listened to a show on NPR about this. IRS actually pays poor people much more than they pay in. Transfer payments.
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Old 03-29-2015, 07:40 AM
 
Location: Houston Metro
1,064 posts, read 1,192,278 times
Reputation: 1514
It's not income. It's just what it says it is...a REFUND on income you've already earned and overpaid in taxes.
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Old 03-29-2015, 08:32 AM
 
2,409 posts, read 2,489,132 times
Reputation: 1807
In calculating net income, it sort of is. I'm pretty sure lenders take this into account, but you can really do yourself a favor by increasing the number of exemptions for tax withholding so you won't have this issue to begin with.
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Old 03-29-2015, 09:24 AM
 
4,626 posts, read 7,197,499 times
Reputation: 4735
You don't make enough money to qualify for a $200,000 mortgage.

Tax refund or not.
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Old 03-29-2015, 10:18 AM
 
Location: The World
3,012 posts, read 1,810,469 times
Reputation: 7773
Why in the world would you want a $200,000 mortgage with your income? That's ridiculous!!

We bring in six figures and wouldn't want to purchase a house that expensive.
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Old 03-29-2015, 10:48 AM
 
96 posts, read 63,181 times
Reputation: 127
Quote:
Originally Posted by lkmax View Post
Why in the world would you want a $200,000 mortgage with your income? That's ridiculous!!

We bring in six figures and wouldn't want to purchase a house that expensive.
Because he makes a lot more money than he officially shows. A lot of people, like tattoo artists and nail salon workers, can cheat the system because they get paid cash.
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