When you've got your eye on a home that's the right fit for you and your family, the last thing you want to hear is that you don't qualify for it. Within the past few years, lenders have become especially critical of what buyers deduct on their tax returns. So, if you usually claim unreimbursed job expenses on your tax return, chances are, you may not qualify for as much home as you'd like. For example, if you earn $80,000/year and report on your taxes that you have $10,000 in unreimbursed job expenses, the lender will base your qualifying ratios on a $70,000/year income ($80,000 - $10,000 in job-related expenses).
To avoid being shocked by news that you don't qualify for a home you've contracted to purchase, make sure you submit all of your financial documents to your lender before making any offers on a home. If you know you have unreimbursed job expenses, make sure you point it out to your loan officer so he/she can determine what you'd really qualify for. And, if you don't qualify for as much as you'd like, ask your loan officer whether there are other loan programs that would help you to qualify for the type of home you'd like to purchase. Knowing what you qualify for upfront, can help you to tailor your home search to what you can actually afford and avoid the disappointment of having to be released from a contract on a home that you've fallen in love with.