Tax return question for new construction pre-approval

[BrandedFab]

Hey everyone!

I have a quick question. If I am trying to go under contract for a new build this October but they home probably won't be finished until next March will my 2011 tax returns still be used for the preapproval/conditional approval? I am asking because I took some losses from a side business I used to operate in 2011 and it would drop my income down greatly for dti purposes.

Any help is appreciated.

[Christian123]

Yes, they will use 2011 and 2012.

 I was in a similar situation in 2011.  The underwriter asked me why I had such a large business loss in 2011 and not in 2012 and just wrote a LOE and they didn't ask any additional questions.  Good luck with your build!

[BrandedFab]

Thank you so much! You've made me feel so much better. Did it affect your DTI any?

[BrandedFab]

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@Christian123 wrote:

Yes, they will use 2011 and 2012.

 I was in a similar situation in 2011.  The underwriter asked me why I had such a large business loss in 2011 and not in 2012 and just wrote a LOE and they didn't ask any additional questions.  Good luck with your build!

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Thank you so much! You've made me feel so much better. Did it affect your DTI any?

[Christian123]

I don't think it did, but I'm not sure if that is due to my husband's income as well.  I have read that they average the income from the 2 years, but I'm not sure if they did that for our loan.

[Mike_B03]

We were in the same situation with the taxes last year, though we bought in early November. For us, they needed 2010 and 2011 taxes for the preapproval and then since the house wasn't ready until May, they also needed 2012 taxes.