Be Aware: Filing for tax extension could delay or ruin your mortgage

[RaidReport]

Great Credit Score. Savings are tens of thousands in excess of required closing costs. Net worth is in a good range for the purchase price of house to purchase. Appraisal came in well over contract price. Everything progressing smoothly until a few days before closing. The problem? I filed a tax extension for 2012 on April 15th. I eventually filed on April 30th and am due a refund. But, the IRS has not updated the official "transcript" and they say it could be the end of July before it gets updated. In the meantime, the mortgage company says no closing until the IRS transcript shows it is filed. Really ticked about this.

 

Anyone else run into this?

[dvdcoll]

Wow, this is horrible Raid, any chance to get the IRS to update sooner considering your situation. Stuff like this kills me, especially since you are getting a refund. Banks went from handing out mortgages like candy to going overboard with things like this.

And to wait until a few days from closing to tell you!

 

It's like I'm preparing for something to go wrong with my application process now...apprasial took place yesteday and now hope that it comes in fine.

 

Good Luck!

[road2freedom]

I can't say I fully understand this. Is this for income verification or to make sure you don't have an undisclosed debt to uncle Sam?

[Redskin547]

Great Credit Score. Savings are tens of thousands in excess of required closing costs. Net worth is in a good range for the purchase price of house to purchase. Appraisal came in well over contract price. Everything progressing smoothly until a few days before closing. The problem? I filed a tax extension for 2012 on April 15th. I eventually filed on April 30th and am due a refund. But, the IRS has not updated the official "transcript" and they say it could be the end of July before it gets updated. In the meantime, the mortgage company says no closing until the IRS transcript shows it is filed. Really ticked about this.

 

Anyone else run into this?

Yes, I was on extension also and Wellls Fargo mtg broker asked me to go to a local IRS office and have them stamp two copies filed and return one to them with an original stamp. that way no waiting. But that was an experienced broker who knew what underwriter would ask for. Sorry that happened to you, maybe you could file an amended return and submit that one with the stamp and that may satisfy the condition to close.

[jak2136]

I ran into this many years ago. Maybe 2001. I had planned to file an extension and was told mortgage could'nt close until the current years taxes were filed and processed.