We collect the last two years of filed tax returns from almost every borrower, as required for almost every loan program. If the tax returns indicate that income taxes are owed, we must show proof that the taxes have been paid.
Proof can be in the form of a canceled check, a receipt from the IRS, or a bank statement from the month of payment reflecting the withdrawal. This is a reminder that borrowers should be prepared to provide this information and to also provide an explanation if the amount that they paid is different than the amount indicated on the tax return.
Borrowers can also be in a formal payment plan with the IRS, if they owe back taxes, and still qualify for a mortgage. FHA, however, requires proof that at least three payments have been made in a timely manner while conventional lenders require proof that only one payment has been made.
We need to also make sure the tax payments do not adversely impact debt ratios.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167