Your Mortgage: If you need it…you should file quickly

Mike Miles

By Mike Miles

It’s okay if you want to call me out on my mistake from two weeks ago. So far nobody has pointed it out. That either means everyone is really polite or that nobody is reading my posts. Ha.

The mistake was made last week. The previous post mentioned that I would explain tax returns a bit further and how they can impact certain borrowers in certain situations. Instead, I got caught up in the excitement of Valentine’s Day and didn’t provide the “Part 2”.

So, let’s dig back in. Ready? This is going to be exciting … sort of.

There is going to be a segment of borrowers that will need their 2018 income tax returns in order to qualify for a home loan. These are borrowers that fit into some of these categories:

  • Self-employed
  • Contracted employees (1099’s)
  • W2 employees that are paid with at least 25 percent of income as bonus/commission

Technically, underwriting guidelines don’t require copies of tax returns until the filing deadline of April 15, 2019 or October 15, 2019, if tax payers file an extension. However, if you’re a buyer that fits into one of the categories mentioned above and you need the income that is reported on our 2018 returns to qualify … you will want to file ASAP.


Underwriting guidelines require that tax transcripts accompany tax returns. Tax transcripts are copies of your returns validated by the IRS. They take the IRS about two months to complete … and that’s if the IRS isn’t backed up. Government shutdowns certainly don’t help that waiting period.

How do I know if I need them?

If your two most recent tax returns, in this case 2016 and 2017, don’t show enough income to qualify by using a 24-month average, AND, if your 2018 tax returns show an increase of income allowing you to qualify … you will know you need 2018 returns.

If that’s the case, and you are considering buying a home in April or May (or soon after), you should file your returns quickly so that you can allow for the time period the IRS will take to transcribe them.

Where can I start?

You should call a trusted loan officer at a company with a great reputation. Unfortunately, most loan officers in the mortgage industry don’t know how to calculate income accurately. While scary, it’s true. You want to use a company that is known for its expertise. You don’t want to get the wrong advice thinking you’re all set only to find out right before closing you have to wait for the IRS. If you’d like to talk about your scenario, give my team and I a call at 913-745-7000.

This weekly Sponsored Column is written by Mike Miles of Fountain Mortgage. Located in Prairie Village, Fountain Mortgage is dedicated to educating, and thus empowering, clients to make the best financial decision possible for their situation. Contact Fountain today.

Mike Miles NMLS ID: 265927; Fountain Mortgage NMLS: 1138268