As you may have read in the news, the Government Shut Down has been difficult for those of us in the mortgage industry. Before we can close a loan in North Carolina, most Investors require us to provide a copy of IRS Transcripts.
These Transcripts provide us evidence that there are no un-reimbursed business expenses (write offs) that would reduce the income we can use to qualify you for a mortgage.
With the IRS.gov website closed… and the folks who are providing the transcripts are furloughed, we can not attain this documentation. We also can not do a Social Security Number Validation – another piece of information that is required for a loan approval, to insure against fraud.
In order to close a loan without the tax transcripts, the following documentation will be required PRIOR to final loan approval
1. Most recent 2 years signed federal tax returns with all schedules
2. Signed initial 4506T
3. If the most recent year tax return shows that the borrower is due a refund, a printout. Our borrower can log into this web site to retrieve the information: https://sa1.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp
4. If the most recent tax return shows that the borrower owed taxes, then a copy of the CANCELLED check made payable to the IRS will be required
If the Automated Underwriting findings show that the Social Security Number must be Validated – well then, it must be validated, and you’ll need to wait to close. Otherwise, we can accept a copy of a social security card.
This does not apply to borrowers who are self-employed, or those who have 5 to 10 homes with a mortgage on them.
Once the Government is back in business (so to speak) the IRS Transcripts will be required on all mortgages that close. This could be another delay – because we anticipate a backlog, and it could take over a week to get the transcripts. Our best guess is that if we get your loan approved on October 15th, for instance – and the Underwriter has the above documentation and you want to close on the 18th, we’re fine. If the loan is at Underwriting (not approved yet) and the Government goes back into the office – then the Transcripts will be required before we can close.
If you are applying for a USDA Home Loan – be aware that we are concerned that the current backlog with USDA Loans, could get worse. All USDA Home Loan Underwriters in NC are currently furloughed.
Have specific questions about qualifying for a mortgage or closing on a mortgage with the Government Shutdown? Leave us a comment below, or call Steve and Eleanor Thorne 919 649 5058 for more information and to get pre-qualified. Not all Banks offer ALL of the NC First Time Home Buyer Programs that we do. Connect with us on G+ or Facebook! @SteveThorneNC and @isellmoney