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<blockquote data-quote="flyfishfreak" data-source="post: 2944946" data-attributes="member: 576336">The 1040&#039;s are not required for a full-doc file. Tax returns should only be used by business owners who are not w-2&#039;ed. Most of us attempt to write off as much as possible on our taxes and you would hate to have your actual income chopped in half becuase of concervative underwriting. You should only have to provide 2 years work history (within the same job field and no gaps), your most recent w-2 and your last two(2) paystubs. The lender will then add your gross income from the w-2 with your Gross YTD on your most recent paystub, then divide that number by the total number months (i.e if your last paystub was the last two weeks in April, then it would use 12 months for the w-2 tax year and 4 months for the current, for a total of 16 months).Also, the Debt to Income Ratio, i.e. DTI is very important. Actually if you are doing a fully verified loan application with A paper status (A paper being great credit, i.e. 680+ FICO) the DTI is usually 45%, not 50%. The lender will determine the DTI by dividing your total monthly debts (total housing expense and credit liabilities) by your caculated gross income. Some lenders have alternative loan programs that allow for a higher DTI, it just depends on that lender and the program.</blockquote>

[QUOTE="flyfishfreak, post: 2944946, member: 576336"] The 1040's are not required for a full-doc file. Tax returns should only be used by business owners who are not w-2'ed. Most of us attempt to write off as much as possible on our taxes and you would hate to have your actual income chopped in half becuase of concervative underwriting. You should only have to provide 2 years work history (within the same job field and no gaps), your most recent w-2 and your last two(2) paystubs. The lender will then add your gross income from the w-2 with your Gross YTD on your most recent paystub, then divide that number by the total number months (i.e if your last paystub was the last two weeks in April, then it would use 12 months for the w-2 tax year and 4 months for the current, for a total of 16 months). Also, the Debt to Income Ratio, i.e. DTI is very important. Actually if you are doing a fully verified loan application with A paper status (A paper being great credit, i.e. 680+ FICO) the DTI is usually 45%, not 50%. The lender will determine the DTI by dividing your total monthly debts (total housing expense and credit liabilities) by your caculated gross income. Some lenders have alternative loan programs that allow for a higher DTI, it just depends on that lender and the program. [/QUOTE]

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