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Valued Member
nymets010
Posts: 40
Registered: ‎02-25-2012
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Tax Transcript Question

I realize now that what you write off on your taxes can affect you DTI. I learned the hard way. I wrote off some gas and mileage and it took away almost 1300.00 a monthfrom my income. This was in 2011. In 2010, i didnt write anything off at all. My question is, what year do they base it off of? Is it an average or current year? If it is current year, then why do they even care about the years before that? Also, if i just wait and file my 2012 taxes without any write offs, will they use that? Please help!

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courtney091082
Posts: 244
Registered: ‎07-06-2007
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Re: Tax Transcript Question

If you are W2'd you might get away with just 2011, and this year. Then again you said you took all the deductions in 2011 :smileysad: ....if you are self employed they will absolutely take an average of 2010 & 2011. I just started talking with a loan officer and she said for my husband that is a W2 Employee to fill out my application with an average of 2011's pay on his taxes after deductions averaged over the year. I wish you luck :smileywink:

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Valued Member
nymets010
Posts: 40
Registered: ‎02-25-2012
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Re: Tax Transcript Question

Thanks Courtney! I am not self emlpyed, i am salaried with commision and bonus. Most of my income is commision though. I have been told different things by different lenders so its frustrating. Some say they take an average and some say they go off the most recent transcript. The worst part is i only deduct mileage so it doesnt really effect my money at all. But i am in sales so i drive ALOT. Lenders wont hear that though. As long as its a deduction, it comes off your allowable income.

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StartingOver10
Posts: 4,578
Registered: ‎03-06-2010
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Re: Tax Transcript Question


nymets010 wrote:

Thanks Courtney! I am not self emlpyed, i am salaried with commision and bonus. Most of my income is commision though. I have been told different things by different lenders so its frustrating. Some say they take an average and some say they go off the most recent transcript. The worst part is i only deduct mileage so it doesnt really effect my money at all. But i am in sales so i drive ALOT. Lenders wont hear that though. As long as its a deduction, it comes off your allowable income.


Yes, this is one of the reasons they require tax returns. I have seen tax returns blow a lot of "pre-approvals" because the applicant gave their gross income to the LO verbally and never provided the tax return until they were under contract. Then the tax return shows substantial deductions for business expenses (milage is common) and there is not enough money left to make any mortgage payment! The bank wants to make sure you can actually afford the payment especially with high LTV loans like VA, FHA and USDA type.

Valued Member
nymets010
Posts: 40
Registered: ‎02-25-2012
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Re: Tax Transcript Question

I understand why they request tax returns, but mileage that i drive really has nothing to do with my ability to pay my mortgage.

Regular Contributor
courtney091082
Posts: 244
Registered: ‎07-06-2007
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Re: Tax Transcript Question

Yep it's just sadly one of those "can't have your cake and eat it too" scenarios lol....I've been self employed for 6.5 years and it stinks when it comes to taxes, huge PITA! But everything else it's gorgeous I work from home, I can take my kiddo to school pick her up and work around anything I have that pops up. I could have probably taken many more deductions over the past few years but didn't knowing I would want to own a home soon. Hopefully after you pay for your gas you still have plenty of income to pay a mortgage :smileyhappy: Wish ya luck!

9/1/2012 ...DRUMROLL .... EQ .. 776!!

I'm FINALLY a homeowner .. 10/24/12!!!!

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