Rainmakers,

For the last two years or so, Fannie/Freddie has required that Borrowers explain all large deposits on bank accounts.  This has been confusing for Mortgage Originators and Borrowers, because Fannie/Freddie did not explain what is "large".  So, it's Underwriter discretion.

For a while, it was suggested that a large deposit was anything over 10% of a Borrower's usual monthly gross income.  That "rule" seems to have faded in popularity, and the suggestion now seems to be anything "unusual".  Still Underwriter discretion.

Hopefully, your chosen Mortgage Broker has become well versed in how to document these deposits.  As you can imagine, the more documentation the better, and a well-worded letter from the Borrower is almost mandatory.

To complicate things further, if a Borrower cannot or will not document the large deposit, the deposit CANNOT be backed out of the loan application if the deposit is not needed to qualify for the purchase or refinance.  This could halt the loan approval progress in its tracks.

The best advice I can give, and one that is hardly ever taken, is for Borrowers to stop moving money around their accounts, if at all possible.  I cannot tell you the money-tranfser purgatory I have seen borrowers get themselves into.

I hope this helps!

Eric S Peltier
Senior Loan Officer
Premier Mortgage Group
303-302-3906
NMLS#279038
CO#LMB100008090

 

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Eric Peltier, Mortgage Lender in Boulder CO

Boulder, CO

More about me…

Eric Peltier - Premier Mortgage Group - Boulder Colorado

Address: 1844 Folsom Street, Boulder, CO, 80302

Office Phone: (303) 302-3906

Cell Phone: (303) 579-6386

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