What Borrowers Should Know about Form 4506-T
The form 4506-T is an important part of the mortgage world. This form helps keep any type of mortgage fraud in check, which in turn helps balance the economy. The 4506-T enables lenders to request the IRS for a borrower’s tax return details for the past three years.
According to the new rules, you have to sign a 4506-T. By signing the form, you give lender the right to look through your past tax filings. Any discrepancy in the numbers will lead to delayed loans and in some cases it could lead to charges of fraud.
It also hurts to have back taxes, so it is advisable to pay them off before signing a 4506-T. Delay in filing back taxes can also prolong the processing time of the loan, which again is not desirable when you are in the market for a new home. Another important factor to this form is that the signing date should not be more than 30 days within the date of application for the loan, leaving little room again for any erratic findings.
Overall, the borrower should remember that the details shared with a loan officer should match the details in the documents procured from the IRS.
Please visit our previous Blog article for more information on how to correctly fill form 4506-T.