Unreimbursed employee expenses can sometimes cause a borrower not to qualify when purchasing a house. These expenses can sometimes also cause delays in your home loan purchase.
2106 Expenses Reduces The Amount of Taxes Paid:
2106 expenses are expenses that the borrower incurred while working at his employer and did not get reimbursed. These expenses are deducted from his or her income therefore reducing his taxable wages.
2106 Expenses Affects Your Purchasing Power:
These 2106 expenses are also deducted from the borrowers income while qualifying for a home loan. If a borrower has a salary and for example making $5,000 a month however on his or her tax returns has $12,000 in 2106 expenses, this $12,000 is deducted from the income and the bank will only give the borrower $4,000 a month. This is $1,000 a month less in income and affect the borrowers qualifying amount. $1,000 a month equals around $200,000 in purchasing power.
If you think you might have these expenses please let your loan officer know prior to filing your tax returns or if you have already files and you have these expenses, make sure you let your loan officer know about these expenses as it will affect the amount you can qualify for.