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Underwriting wants to deduct expenses - help.

We live in a non community property state. My wife is purchasing a house and I am not going to be on title or on the app. My income is not being considered in the DTI ratio.In 2015 I had some expenses associated with my job that were not reimbursed - this employer was W2. My wife and I filed our taxes jointly. Even though the expenses are listed under my name, social security number, and job title at my employer, our loan officer is concerned that underwriting will require that these expenses be deducted from my wife's income. This will mess up the ratios: my wife is purchasing a second home so that we can move and convert our current home into rental property. by Gilliam_william22319 from Clark Fork, Idaho. Jun 4th 2018 Reply

Hello sir, my family is from Clark fork. McMillan's.. any how, the form you filled out is a 2106 form its a unreimbursed business expense form that form if in fact you filed jointly it will be used against you because you are both filled jointly. That money gets taken right from the top and this then creates a lower income. You are more than welcome to call me at 208-571-0994

Jun 4th 2018
William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,414 contributions

First, for lending purposes, we only need your last 2 years tax returns, (2016 & 2017)... so what happened in 2015 is irrelevant. But if you meant 2016, then we would need more info.. When you file your taxes, one of the IRS documents you fill out is IRS Form 2106, for "non-reimbursed" business expenses. If this document has both your names on it, then the expenses were shared jointly, and therefore must be deducted from the income.. However, if your wife is paid with a W2 and is NOT paid more than 25% of her income in commissions or bonuses, then tax returns are not needed and 2106 expenses are ignored. If tax returns are needed but the IRS Form 2106 is in Husbands name only, then the expenses can be ignored.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Jun 5th 2018
Larry Gray (lgray_312_247)
#587 ranked lender in California - 1,139 contributions

Obviously if your wife can qualify per the scenario that William Acres described, avoiding tax returns altogether will eliminate having to include those expenses in determining wife's qualifying income (assuming she is a w-2 employee). What is not clear is why you cannot simply go on the purchase together. I am assuming you are the only one on the current home loan? Since it sounds like you are purchasing it really as your primary home, thereby renting out your current home, you could possibly qualify together and subtract the majority of future rent from DTI in qualifying (simply requires a rental agreement and the copy of check for initial deposit.) There is even a loan now whereby lender will not count the PITI of the current home in qualifying DTI as one seeks to purchase that dream home. Whether you rent it out or sell it afterwards, the loan is allowing you to purchase without including that part of the equation in qualifying.

Jun 6th 2018
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