Causing delays in the mortgage approval process.

Ahhh… Spring, the flowers are blooming and the kids are running in the yard and this year’s taxes are filed and behind us. This is a great feeling, but one that soon can go away when it comes to securing a home loan.
From first time buyers to seasoned borrowers, it is no secret that your lender will require you to provide income documentation in order to obtain a home loan approval, including W2 paystub’s, tax returns and the like. What you don’t know is that tax transcripts are required on most mortgage loans originated across the country. Tax transcripts are a validation that comes directly from the IRS to prove that the income used to qualify the borrower is actual income of the borrower and that the lender didn’t miss something or that the borrower is not potentially committing fraud.
Normally, getting copies of tax transcripts isn’t a big deal, but for borrowers who filed their 2015 returns late, or who mailed in their tax return versus filing electronically, tax transcripts may not be available or be delayed. Depending on the source of the borrower’s income, the overall strength of the loan file, and the loan program, the lender may be able to make an exception and close on a loan with missing transcripts, but not always.
Be aware that if asked for an extension on a closing or a commitment date due to an inability to obtain transcripts, don’t blame your lender. This situation is temporary and generally by the end of June transcripts are on track and on time. It’s always better to take the time to do it right. As I have always said, careful and steady always wins out over quick and sloppy.

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