As a lender, when we review your loan file for final approval, one of the items we are concerned about is the source of funds for your down payment and closing costs. Most likely, I will ask you to provide statements for the last two months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stocks, bonds, mutual funds, and even your 401K & other retirement accounts. If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them that must be documented.

The mortgage underwriter - the person who actually gives the final approval for your loan - will probably require a complete paper trail of all the large withdrawals and large deposits. You may be required to produce cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious. To ensure quality control and eliminate potential fraud, it is a requirement on most loans to completely document the source of all funds.

Bottom Line: Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for us to properly document. So leave your money where it is and talk to me before moving it around; the same goes for changing banks as well!