The Mortgage Process and Your Income Tax Return


The Mortgage Process and Your Income Tax Return

By now you know that your mortgage lender is going to want to see your latest tax return. In fact, in addition to the copy you’ll be asked to provide, you’ll sign a form allowing your lender to get a “true” copy from Uncle Sam.

So… don’t try to fudge and give your lender a bogus return. It won’t work.

Since tax day has just passed and you may still be feeling the strain, we thought we’d bring you a bit of humor with some do’s and don’ts. Unfortunately, these “don’ts” come from real-life situations that tax preparers and lenders have encountered.

If you’re self-employed, remember that you’ll have to work a little harder to prove your income. When you’re anticipating a purchase or a refinance it isn’t the time to pad your expenses. If you’re a building contractor, don’t remodel your son’s basement for free, then lump the expenses into your legitimate materials expense.

Remember that lenders are leery of self-employment, so don’t quit your salaried position to go into business for yourself until after your loan is finalized.

If you take a write-off for a home office, do make sure your lender notices, and don’t add that kitchen remodel into “maintenance” expense for your office.

Do’s and Don’ts for everyone…

Do write off legitimate deductions, such as charitable contributions and mileage, mortgage interest, medical expenses, and dependents.

Don’t deduct your dog’s veterinary bills. And… just because your dogs are named George and Susan, don’t try to add them as dependents.

Do write off unreimbursed business meals and mileage as per the guidelines. Keep in mind this deduction will be deducted from your income. 2106 deductions reduce your gross income with mortgage lenders.

Don’t confide to your lender that those business meals were actually just you and your family.

The same goes for business trips – if you legitimately travel to another city on business, deduct it. If you and your family rent a house at the beach for a week and business is the last thing on your mind – don’t ask your lender to overlook that deduction.

Do file your taxes on time.

Don’t explain that you haven’t had time to file taxes for the past few years, but you’ll get caught up soon.

Do include all your income on your tax return.

Don’t tell your lender to disregard the tax returns because most of your income is “under the table.” And don’t hand the lender several W-2’s or 1099’s and say “I forgot to add these to my tax return.”

The thing to remember is that your lender has to use the information on your tax return.

No matter how much you confide that you really cheated “just a little,” he or she can’t consider your income to be anything but what you reported to Uncle Sam.


Do take legitimate deductions for court ordered maintenance.

But Don’t confide to your lender that you didn’t actually pay for that maintenance – or for anything else you deducted from your income.

Your lender’s job is to help you get the best loan possible – while also protecting the bank. His or her job is to help you borrow money that you actually can repay.

When you’re ready to purchase or refinance a home in Texas, get in touch. Today’s interest rates are low, and so are the fees at Homewood Mortgage. Call the Mike Clover  Group today at 1-800-223-7409 or apply on line at

We’ll find the best loan for you and your unique situation.


Mike Clover

Mortgage Banker

Homewood Mortgage, LLC

Toll FREE: 1-800-223-7409

O: 469-438-5587

F: 972-767-4370

NMLS# 234770



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