Posted on: 18th May, 2010 05:49 am
I'm a first time home buyer, and in the current economic climate my lender has asked me to submit a 1040 in addition to all of the other necessary paperwork. I am a little worried about this; should I be concerned?
Hi yon_emile,
1040 form is the standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns. This will help the lender to know your annual income. I don't think you need to worry about this.
Thanks
1040 form is the standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns. This will help the lender to know your annual income. I don't think you need to worry about this.
Thanks
Today lenders often ask for 1040 to see your total picture financially. Even if a lender does not ask for your 1040, they almost always have you sign an IRS Form 4506-T. The lender sends that to a credit agency and in a couple days gets a transcript of your last one or two years tax returns.
If they ask for your 1040 up front, they are just being efficient. Rather than waiting for the transcripts, get the 1040 now and know what the transcripts are going to turn up.
There are borrowers who have a W2 job but also have a self employed job on the side or as a second job. A year ago, such a person could apply for a mortgage and show pay stubs and W2s for the regular salaried job and get a mortgage and tell nobody about the self employed job. That does not work now. The lender gets the 1040 and can see the self employed job. If it shows a large loss, that will be subtracted from the W2 income.
The basic message is that if you have given the lender your total financial picture and nothing you have not disclosed shows up in the 1040, you are fine.
If they ask for your 1040 up front, they are just being efficient. Rather than waiting for the transcripts, get the 1040 now and know what the transcripts are going to turn up.
There are borrowers who have a W2 job but also have a self employed job on the side or as a second job. A year ago, such a person could apply for a mortgage and show pay stubs and W2s for the regular salaried job and get a mortgage and tell nobody about the self employed job. That does not work now. The lender gets the 1040 and can see the self employed job. If it shows a large loss, that will be subtracted from the W2 income.
The basic message is that if you have given the lender your total financial picture and nothing you have not disclosed shows up in the 1040, you are fine.
