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Posts Tagged ‘mortgage tips’
What is IRS Form 4506 why does my lender want it?
When applying for a mortgage , your lender may ask you to sign and submit a Form 4506. It is a form we get directly from the IRS which some mortgage lenders may require you to complete as part of your loan application.
What is a 4506 used for?
Form 4506 T, as it is most often requested, is also called a Request for Transcript of Tax Return. This document allows for a copy of your tax return to be obtained from the IRS directly. A mortgage lender may request this to verify your income documentation that you have provided as part of your loan application.
There are a few things to know about it.
- This form may be necessary if you are a self-employed borrower and the lender wishes to see official documentation of your most recent earnings from the IRS.
- This form is also used to detect fraud in cases where there is an apparent discrepancy. If there is some reason the lender does not believe your reported income is accurate, they may take steps to verify it through this manner.
- Many mortgage companies also use this tool randomly within their business. For example, during the course of the day the lender may request a certain number of these documents. This is often for a quality control measure and those who receive the request are selected randomly.
4506 as part of the loan process
The fact that your lender has asked for a signed 4506 doesn’t necessarily mean they suspect fraud or have identified an issue with your loan. It may simply be part of their regular process.
During any loan application, it is necessary for mortgage lenders to verify the information you provide to them. So as a rule, when filling out documents to obtain a loan, always provide the most accurate information. Ensure that all statements you make are accurate and verifiable to avoid any problems with this step or other verification steps the lender will take.
Tips for Choosing a Great Loan Officer
Everyone knows that having a great loan officer is important when you are getting ready to buy your new home. Choosing the right loan officer doesn’t have to be a challenge when you follow these simple suggestions.
Ask for referrals
First, you can save yourself quite a bit of time and effort by looking for referrals from people that you know. Just about everyone knows someone who has bought or refinanced their home in the last few years. Ask those folks what they thought of their loan officers and if they could provide you with a referral.
If you don’t know anyone who has used one recently, you can always check other sources. The Internet is a great resource to find out information about loan officer and to find testimonials and referrals from their customers.
Interview them before committing
Once you have a list of officers that you are considering, you will be able to interview them. Ask as many questions as you have, and make sure that they are able to explain all of their answers to your satisfaction. Make sure that they are able to help you find the program that is going to work for you specifically. You will find that they can offer a number of different programs, and it pays to learn about them all so you will be able to make an informed decision.
Be prepared
The loan officer will need to have access to your financial information. When you call for an appointment, ask them what information they are going to need. In most cases, you will at least need to have information about your income and assets. They will also need to know your credit score, but don’t let them pull the score. Wait until you’ve chosen the loan office with whom you want to work. You want to wait so that there aren’t too many hard pulls on your score, which can lower it. If you have a dozen people pulling your score, it might drop enough that your rates are going to be higher!
Only after you have investigated all of your options and are able to choose one that offers the most should you choose. Put in the time and do the research. You will have a better experience for it, and it can help you to save quite a bit of money over the course of your loan.
