With tax season in full swing, many of your clients are working to collect, organize and file their 2016 tax returns. Because final tax information must be received before final loan approval, tax season is an important time in the mortgage industry. Here are some potential delays in closing during tax season:
Delays in Closing during Tax Season
After April 18, 2017, the previous year’s tax returns are required and lenders must have a copy of their transcripts or their filed extension in order to close their loan.
The closer we get to the tax deadline, the slower requests are returned by the IRS because of the high demand. This can delay closing for those borrowers that do not keep records of their taxes or are filing their taxes too close to their closing date.
Requesting Previous Tax Returns
During this tax season, many home closings are subject to delay because clients may not have their most recent tax returns on file. Requesting previous years’ tax returns electronically will help speed up the process and allow for a smoother closing when the client is purchasing a home this season.
Filing electronic tax returns with the IRS may be able to help your clients accelerate the documentation process considerably when buying a home in 2017. For buyers hoping to use their 2016 income to qualify, filing their taxes electronically allows lenders to verify their transcripts much sooner; qualifying them with their most recent income.
If you have clients actively looking for homes, please give us a call so we can figure out if their latest tax returns will be required to qualify. We are happy to help our referral partners proactively account for any IRS tax return delays when writing the purchase contract. We would also love to help educate your clients on the timeline of the loan process. Please don’t hesitate to give The Polder Group a call!