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How Your Tax Return Affects Your Mortgage

By Marcie Geffner - LendingTree

When you apply for a mortgage to buy a home or refinance an existing home loan, one of the most important documents you’ll have to give your lender is your federal income tax return.

Typically, you’ll have to provide a copy of your Form 1040, whether it’s the short Form 1040-EZ, medium Form 1040-A or long Form 1040, along with all the pages and schedules.

You’ll also have to sign a Form 4506-T, which allows the lender to get a copy of your tax return directly from the IRS. This allows the lender to make sure you didn’t dummy up a fake tax return and try to use it to commit mortgage fraud.

The lender will scrutinize your tax return, looking for information about your income and expenses and any irregularities that suggest you could be hiding material facts about your personal finances.

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