Can You Amend Your Tax Returns To Show Higher Income To Qualify For A Mortgage?

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
Short answer is NO, if your loan officer, CPA or other financial advisor has told you that you don’t make enough to qualify for the mortgage based on what you have initially filed and to amend your returns to show more. DO NOT fall into that trap, you will be responsible for the tax liability and we wouldn’t be able to use the additional income.

The guidelines state:
Amended tax returns may be accepted when IRS validation are obtained, proof of any additional tax liability has been paid, and the amendment is not solely the result of the borrowers attempt to qualify for a home mortgage;

Examples of emended tax returns that MAY NOT be incorporated into qualifying income calculation include (but not limited to):
  • Increased Schedule C Self-Employment income (from increased gross receipts of decreased expenses) which cannot be validated by a 3rd party documentation;
  • Increased rental property cash flow from increased rental income or decreased property expenses which cannot be validated by 3rd party documentation
If necessary documentation cannot be provided to validate the reason for the amended tax filing, the borrower must be qualified on the lesser of the original filing or the amended tax returns.

Hopefully as a borrower you are reading this article prior to taking the leap of faith with amending your returns assuming it will help you qualify. If you’re reading about this after the fact I’m sorry, you may have to wait at least an additional year or possibly two to qualify for a new home loan.

We do have a Bank Statement program that requires 30% down, you must have at least a 750K NET worth (yes net worth, meaning your cars, jewelry…etc do actually count towards that). This program will help bridge the gap between being able to qualify for a conventional or government direction. Interest rates are actually quite favorable when going this direction as well.

Please feel free to contact us directly with any questions regarding this topic at: 800-779-4547 or [email protected]