2007-06-13 01:46:04 · 5 answers · asked by parker50 1 in Business & Finance ➔ Personal Finance
While there are probably many lenders that are unethical and want you to borrow as much as you can, I believe the reason they use Gross income versus net income is because it is the easiest way to find a common standard. There are many types of borrowers, some self employed, some salaried, some married, some with kids, some with no kids, etc. People can pay or not pay taxes (I don't endorse not paying taxes) and the only thing that is 100% provable is Gross Income. We are not tax accountants and finding peoples net incomes on every transaction could be almost impossible. To prove my point, you can go to your HR department any time you want to change your witholdings on your check to be higher or lower and affect your net pay if you wanted. You cannot change your gross pay unless you get a pay raise.
2007-06-13 03:23:20 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Basing mortgage affordability on gross wages is, to put it mildly, downright stupid. They are not taking into account other indebtedness and expenses you may currently have or might incur in the future.
2007-06-13 01:59:57 · answer #2 · answered by acermill 7 · 0⤊ 0⤋
I personally would file the correct amount that your husband made. If you have the proof that he made that amount, if the IRS audits you for it, you can prove it. Which in turn would make the IRS audit the employer and THEY would have to deal with the IRS on that issue. If you have the proof, be honest about it. Also keep your records safely stored away for a minimum of 10 years. Something similar happened to my grandmother about 9 years ago and the IRS audited her. She was able to provide everything they needed and filled out a few forms. After that things went smoothly for her and the company got slapped with a hefty fine. Also, I believe if you use Turbo Tax to file.. There is an option that you can select that states something like "I have my W2 from my employer, but I need to make a correction to it because some information is wrong"
2016-05-19 00:51:39 · answer #3 · answered by ? 3 · 0⤊ 0⤋
That way you will qualify for a larger mortgage. Remember they are in the mortgage business and WANT you to borrow as much money as possible. If you can't make the payments, they will just foreclose and keep your downpayment, too.
2007-06-13 01:50:19 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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2007-06-14 20:20:53 · answer #5 · answered by linda w 1 · 0⤊ 0⤋