There are a number of reasons why people declare extensions on their taxes, but I have found that it is most commonly done by small business owners who have very complicated returns due to multiple income streams and a number of different types of write offs. These people are often earning a nice living, own their own homes, and move several times in the course of building their business. As their income grows, so too does their ability to borrow.

Unfortunately, when you file an extension it can be difficult to qualify for a mortgage. There are lenders out there which will not lend to anyone who is on an extension, regardless of the reason. And there are many mortgage bankers who do not know the correct procedures as per Fannie Mae, Freddie Mac, and the FHA in relation to extensions, meaning that the loan file is not properly managed

But if you are in this situation, don’t worry. You can absolutely qualify for a new home. You simply need to have proper documentation showing the extension was granted and a copy of the previous two years of tax returns. And if you have this information you need to make sure you contact a qualified loan officer who has been down this road before and can properly manage your application.

Should you have any questions about whether or not you can qualify to buy a new home, please contact me and I will go over your application. Should you have anything to add in relation to calculating income for people who filed an extension, please leave a comment.