Now that tax day has come and gone, and we have seen the dust settle on our tax returns, it is time to consider how our most recent tax filing will impact our ability to qualify for a mortgage. As strange as it sounds, your ability to qualify for a mortgage could have changed drastically in the last 2 weeks, even if nothing in your life did. Before the 15th of April we could, in most cases, simply use your 2011 and 2012 tax returns to qualify you. Now that April 15th has passed, we need to use the 2013 return.

And while this will not have a great impact on most people, if you started claiming new deductions, had a substantially lower income last year, or began showing something on your return this year that hadn’t been there in the past, you may not be able to qualify for the same mortgage as before. This is because the tax return is used to verify income; your paycheck is only one part of the process. And this change can impact you even more if you are self-employed.

Conversely, if you stopped declaring a deduction, began showing new sources of income, or had a substantially higher income, you might qualify for a larger income. And again, this is likely to impact self employed borrowers more than any others.

So if you have been out looking for a house, it might be a good idea to give a qualified mortgage professional a call to make sure you are still working with the same numbers. There would be nothing worse than going into contract on a home, only to find out you no longer qualify for the mortgage.

If you would like to have your situation reviewed with a mind to you 2013 taxes, please contact me and I will let you know what you qualify for. If you have anything to add about how this year’s taxes will impact house hunting, please leave a comment.