Why Do Lenders Need Tax Transcripts

In short, lenders use tax transcripts to confirm that the tax and income documents you submitted to the lender are the same documents that you submitted to the IRS. This enables the lender to verify your past income while also helping them reduce mortgage fraud.

Do all lenders require tax transcripts?

Non-Delegated only: Tax transcripts for the most recent one year are required for all borrowers whose income is used to qualify. If only W2/1099 income is used to qualify, W2/1099 transcripts are acceptable. When tax transcripts are provided, they must support the income used to qualify.

Do underwriters always pull tax transcripts?

Tax returns — or IRS transcripts Two years of tax returns are the norm, and these are also typically requested at the outset for preapproval. However, for self-employed loan applicants, the underwriter will often want to get transcripts directly from the IRS once the application reaches their desk.