Assets, Your Mortgage File

Large Deposits

One of the things a processor/underwriter is looking for on a bank statement is the presence of large, non-payroll deposits.

Why?  What business is that of theirs?

I’ve had that question shot at me a million times when I attempt to address a deposit on a bank statement. But seriously, why do they care?

That money came from someplace, and underwriters want to make sure it came from an acceptable source.

What does it matter, acceptable or unacceptable?

There are regulations that dictate which types of funds are acceptable for down payment and closing costs. Here are some acceptable funds:

  • Gift from a relative
  • Payroll or funds saved from payroll
  • Secured borrowed funds ( a loan against an auto, or 401K)
  • Funds derived from a sold asset
  • Funds from stocks, or bonds

Here are unacceptable funds:

  • Unsecured borrowed funds. (from a credit card or unsecured loan)
  • Gift from a non-relative
  • Cash saved at home or outside a financial institution

You get the picture. So as you prepare to refinance or purchase a home, remember to watch what goes in or our of your account and speak with your loan originator about the details.bottom

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