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I am a 1099 contract worker who recently applied for a home loan. I gave all of my tax documents and 1099 statements for the last 2 years and bank statements to the lender on the 1st day. We were told that we were preapproved and to look for a house. After spending 550 on an appraisal and extra on inspections the loan went to underwriting at which time it came back denied with them saying i make 1700 a month. My bills with cars and rent are 2k a month alone. My wife dosent work so no income from her. Based on how i pay my taxes they take the net off my schedule c. Im an insurance agent with residual income that has worked as a contract for the last 8 years with the same company. I want to know am i screwed with this lender who does in house lending or is there something i can do to show my True income and ability to pay not using tax write offs. Thanks in advance for the help.
Tough to answer without viewing full tax returns for 2013 and 2014. For those years, what numbers occupy Line 31 of the Schedule Cs? Also, is there anything on Line 21 of the Schedule A?
This is not the only answer, but if you file amendments to the returns that involve lesser write-offs and thus more net income, sufficient to qualify, this might work. But you'd have to pay the IRS additional $$. And, when you file 2015 taxes, look at those write-offs, work with a smart lender, and keep your net income within the bounds of qualification.
What kind of loan were you on? price/down payment? prop taxes?
Line 31 average between the 2 years as 23k. Majority of my write offs are from car mileage almost 90%. We are 1st time buyers fha 30 year fixed 5% down and there are property taxes. Can I ammend my return quickly as we are scheduled to close by december 1st or scrap this one and get my taxes in order and wait another year.
Line 31 average between the 2 years as 23k. Majority of my write offs are from car mileage almost 90%. We are 1st time buyers fha 30 year fixed 5% down and there are property taxes. Can I ammend my return quickly as we are scheduled to close by december 1st or scrap this one and get my taxes in order and wait another year.
You would have to take the return to your local IRS office, and get a stamped receipt from them, and then your lender will have to wait until the return is registered and they can obtain Tax Transcripts via 4506T.
To be honest, I can't tell how your lender might view this, having declined, but another lender could likely proceed, because what you are doing is legal.
***You will have to jump through hoops re: money owed. Copy of cashiers check (or cleared check or whatever), and then bank statement to trace the amount paid and prove you did not obtain a side loan to pay the taxes due. Copy and save everything as if you are being taken to court. FHA= you should be able to get to a 55% overall debt ratio unless you are using down payment assistance, then likely 45%.
Before you take any action, run this past your lender.
Thanks for the info. You mentioned this is not the only answer. Are there any other options as this seems like a hail mary. Thanks in advance for the help.
Purchased. Im not sure that will lower my debt to income enough becuase of my income dropping almoat in half. The thing that makes me upset is the loan officer had all the info in front of them and they new upfront that I was a 1099. I should have never been pre-qualified. This is a direct lender do you think they will take bank statements or proof of rent paid as well as a current profit and loss statement?
You are exactly right. I am very often embarrassed to be in mortgage banking. So many documents to sign, and so little uniformity of Process. You should raise Holy Hell up the ladder at that lender, they placed you in a very bad position. Get a pound of flesh and $$ to cover inspection, appraisal, everything.
Purchased. Im not sure that will lower my debt to income enough becuase of my income dropping almoat in half. The thing that makes me upset is the loan officer had all the info in front of them and they new upfront that I was a 1099. I should have never been pre-qualified. This is a direct lender do you think they will take bank statements or proof of rent paid as well as a current profit and loss statement?
Where you preapproved or just prequalified? Prequals do not mean much, they just take your word for it without seeing the documentation and let you know that you should qualify if what you say is true.
Only by reviewing your letter can we decipher the disconnect. It's unfortunate, but if you can document what you state (they had all documents from day one), I would gather the pre-approval letter and emails showing where these items were sent and email the CEO, their compliance officer (may be on website), tell them it's inexcusable, nothing changed, and you feel compelled to contact the CFPB so that other buyers don't waste their money.
You don't say if you went to bank or broker, did the same person review the taxes and issue the letter? There is a serious disconnect with your lender or someone was not trained correctly, and you were the training ground.
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