Unclaimed Income -- Mortgage Approval?

[Anonymous]

Hey guys,
     I'm a 21 year old waiter and my fiance and I are looking to get approved for a mortgage because the market is fantastic and we could afford it. She's got a job that pays 27800 a year and I make about 21000 a year. Unfortunately, I've only got 7000 dollars on my w-2.

     The restaurant I work for is a privately owned business and I wasn't told that I was supposed to claim my tips every week so our accountant must have been claiming the minimum for me all year. I've considered asking her to re-issue me a W-2 but in all honesty, I'd worry about my job security if my employer all of the sudden had to dish out another 500-800 dollars in taxes because I wasn't claiming tips all year and all of the sudden want to. I've started claiming my tips on my timecard now to prevent this from being a problem in the future, but that doesn't do me any good right now.

     Most mortgage lenders require 2-3 years W-2 + Tax Returns + 1mo Paystubs. I've got one year of work on the books, so I know that already puts me at a disadvantage (not even considering I only have 7500 on that w-2 in the first place), but what I'm thinking might help my case is to show them my paystubs with how much I actually make a week/month. I could say that I've recently been promoted or something along those lines. I think if they see the money that I'm actually pulling in each week they might be more likely to lend.

    I'm just wondering what you folks advise I should do.  Thanks so much for your help and for taking the time to read through this!

[namvet]

Contact a good Mortgage Broker in your area.  It looks like you have done some research so let a professional give some pointers.

[r1lukasz]

Im not a expert here but you need to show your last 2 years of income,you only paid tax on 7K income , you will have to resubmit your tax income and pay back to uncle sam.

[courtney091082]

I'm self employed and I have read, read, and read some more. They'll go off your Schedule C and I don't think there is much budging on that. 

If you don't claim it on your income taxes then it doesn't really count as money you can use to borrow with.

Good luck though  

[Anonymous]

Thanks for the replies; I appreciate your help.  My problem is that if I try to claim more my employer will most likely be upset that he has to dish out more taxes on my behalf.  Doing the calculations (rudimentary, mind you) if I claimed 16000 (which is pretty close to accurate) I would owe about 1000 in federal taxes alone, plus another 300-500 in SSI/Medicare.  I personally don't mind that at all, I'd actually rather be honest than not.  The biggest hang-up is that the only way I can see my employer being ok with this situation is if I offer to pay the extra taxes he'd owe (another 500 or so).  2000 dollars is a lot to dish out on short notice (but not impossible).

As a side note, if on my tax returns I claimed another 3-5 thousand in tips do you think that'd reflect negatively on my employer due to the discrepency?  Or is something like that assumed due to cash tips throughout the year?  I really just need more of my income on paper than what I've got right now and I'm looking for any way to reasonable do that without worrying about being fired.

[boomhower]

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@Anonymous wrote:

Hey guys,
     I'm a 21 year old waiter and my fiance and I are looking to get approved for a mortgage because the market is fantastic and we could afford it. She's got a job that pays 27800 a year and I make about 21000 a year. Unfortunately, I've only got 7000 dollars on my w-2.

     The restaurant I work for is a privately owned business and I wasn't told that I was supposed to claim my tips every week so our accountant must have been claiming the minimum for me all year. I've considered asking her to re-issue me a W-2 but in all honesty, I'd worry about my job security if my employer all of the sudden had to dish out another 500-800 dollars in taxes because I wasn't claiming tips all year and all of the sudden want to. I've started claiming my tips on my timecard now to prevent this from being a problem in the future, but that doesn't do me any good right now.

     Most mortgage lenders require 2-3 years W-2 + Tax Returns + 1mo Paystubs. I've got one year of work on the books, so I know that already puts me at a disadvantage (not even considering I only have 7500 on that w-2 in the first place), but what I'm thinking might help my case is to show them my paystubs with how much I actually make a week/month. I could say that I've recently been promoted or something along those lines. I think if they see the money that I'm actually pulling in each week they might be more likely to lend.

    I'm just wondering what you folks advise I should do.  Thanks so much for your help and for taking the time to read through this!

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That's mortgage fraud, don't!  Your employer shouldn't be mad that you are correcting something that gets them corrected with the tax man. If they or you are audited and find out about the discrepency it would be an issue.  I'd at least bring it up and see what kind of feeling you get from them.

[StartingOver10]

As Namvet said, get a good mortgage broker/mortgage banker.

As to your issue, it is really two issues: first, correcting your income and the tax return for the past year, along with the additional funds due is your first priority. Fortunately you caught this error after one year and not several years. The second issue has to do with how much home you can buy. Have you considered purchasing a home with the amount you and your fiancee qualify for now without using your adjusted increased income? This way the mortgage payment will be lower and much more comfortable for you both since you really are relying primarily on one income and not two incomes.

[Anonymous]

StartingOver10, yesterday I was actually using some online mortgage approval calculators (not sure how accurate they are, but it at least gives me a sense) and at our current income and debt ratio it looks like we could get approved for around 110,000.  So one option would be to save up for a hefty downpayment (I'd say at least 30,000) and just get approved for whatever we can.  I'm calling our accountant at work this morning so hopefully I'll have an update shortly.