What Could Go Wrong Filing Your Taxes During a Loan

I would like to discuss obtaining financing during tax season – this only pertains to conventional financing.  If you are in the middle of a transaction with a conventional loan, probably more so for purchases, then it might be a good idea to consult with your loan officer prior to filing the return with the IRS, and here’s why:  Conventional guideline requirements are such that if you file your return, then we have to wait for the transcripts to show up at the IRS and be available for the underwriter before closing the loan.  As you know, the government doesn’t always work at the pace we would like which means there is some lag time between the time you file and the time it gets entered into the IRS database and made available to 3rd parties.  This also depends on how you file, manually or e-filing.  If you e-file then the transcripts show up faster; however, that could still be a couple of weeks or more.  If you manually file, it could be 4-6 weeks.  Purchase transactions are typically written with a 30 day close, and as you can see this could hinder you from closing on time.  The main thing is always consult with your loan officer before making any changes in your financial scenario including filing taxes. 

 

Cary Donham