In the United States, what is a document loan when buying a house?
In the United States, what is a complete document loan?
What are the tax filing requirements for lenders when buying a house with a loan in the United States?
1. In the United States, buy a house with loan
What is a file loan?
In the United States, a loan for a house is a loan that refers to The lender needs sufficient information to prove the borrower's income and assets to provide financing.
Most of the loans to buy a house in the United States are document loans. Loans without documents are also called "high risk" loans. Therefore, it is best for the borrower to obtain a documented loan by providing the necessary loan information.
2. In the United States, loan to buy a house in
What is a complete file loan?
In the United States, the complete document loan refers to the loan in which all income and assets of are recorded. Full File Loans are often called "full text" loans in the mortgage industry and are the most common type of loans to finance and buy a home.
When buying a house with a loan in the United States, the borrower provides complete documents according to the lender's requirements for the loan, proves the borrower's assets and income source, debt status, credit report , etc.
Borrower's tax information is an important part of proving the borrower's income and an important basis for lenders to review the borrower's income. Under the complete document loan, the lender has relatively clear tax filing requirements for the borrower. Then, many friends will ask, what are the bonded requirements during the actual operation of buying a house with a loan?
3. What are the tax filing requirements for lenders in
when buying a house with a loan in the United States?
In the United States, when buying a house with a loan, is aimed at borrowers from different sources of income, and the lender's tax filing requirements are different.
1) Working class with Form W-2:
● In buying a house with a loan in the United States, lenders are required to provide Form W-2 for the past two years: Form W-2, officially known as " W-2" and is a tax form of by the U.S. Internal Revenue Service (IRS), which is a form used by employers to fill out the wages paid to employees and the taxes withheld from them.
● In buying a house with a loan in the United States, lenders are required to provide tax returns for the past two years: The tax returns in the United States are reported to Internal Revenue Service (IRS) or state or local tax agency , and are usually prepared using forms stipulated by the IRS or other applicable tax authorities. It mainly contains financial information used to calculate taxes.
In addition, there are two situations in buying a house in the United States regarding working-class tax returns:
■ Every mortgage sold on the secondary market in the United States will be reviewed through the automatic underwriting system. The automatic underwriting system is using credit scores as a scientific method for measuring the potential risk of borrowers to lenders . If you are a W-2 salary earner and the automatic underwriting results show that you do not require a tax return, you may not need to provide a tax return.
■ In the United States, when buying a house with a loan, If the W-2 wage earner has any of the following situations, he or she needs to submit a complete tax return for the past two years:
➢ Owner rental income
➢ Owner social security income
➢ Owner pension income
➢ Plan C income exceeds the normal W-2 work
➢ There is a cooperative relationship with enterprises or other real economy
Some banks have additional requirements: Even if the automatic underwriting system shows that your loan does not require a tax return, due to some banks' relationship with Fannie Mae and Freddie Mac or the company's preference for risk , the bank will ask you to provide a tax return.
2) Self-employed person:
In the United States, in the United States, self-employed persons include self-employed persons or at least 20% of the company's expected borrowers.
● When buying a house with a loan in the United States, the lender requires tax return for the current year and the previous two years .
● When buying a house with a loan in the United States, the lender requires signing Form 4506-T: Form 4506-T allows the lender to obtain a copy of the tax return for the borrower from the U.S. Internal Revenue Service (IRS) directly from . The lender uses a copy of the tax return to verify whether the tax return provided by the borrower matches the tax return in the IRS file.
● When buying a house with a loan in the United States, the lender requires Schedule C: Report net income . Lenders usually analyze the borrower’s tax returns to confirm their taxable income. If the lender analysis results differ from the borrower's report, it will have an adverse impact on the borrower's mortgage approval.
3) In addition, special circumstances regarding self-employed persons submitting tax returns:
If self-employed borrowers have difficulties in recording income , the lender allows such self-employed borrowers to only explain the income and do not need to submit tax returns. But therefore, self-employed borrowers need to pay higher loan rates and at least 30% or 35% down payment for .
