The real estate process usually requires one or more earnest money deposits from buyers to demonstrate that they are proceeding in good faith. Deposits must be handled in a specific manner in order not to delay the underwriting approval process. This article offers details on earnest money deposits for Advance NC home transactions.
Location of Funds
It is important for home buyers to use their own funds for earnest money deposits. Many mortgages specifically mandate that buyers utilize their own money for all expenses connected to the purchase. Buyers are typically asked to submit copies of bank statements verifying that the money was already in their bank account and that earnest money deposits were withdrawn against that account. Account statements should also include enough balances to cover closing costs and down payments. Lenders will verify all of this information as part of the mortgage underwriting step. Buyers failing to use personal money may impact their loan approval.
Some types of home loans permit gifted funds to buyers from their family members. However, buyers should not have family members submit earnest money deposits on their behalf. The proper procedure includes a gift form, copies of bank statements from the gift giver verifying where the funds originated, and then bank statements from the home buyer demonstrating receipt of the funds. Following this process can lead to fewer issues when underwriters review the paperwork.
Preparing for Earnest Money Deposits For Advance NC Home Transactions
Buyers planning on an upcoming property purchase can take a few steps to minimize delays with their loan approval. First, they can make sure all funds required for earnest money deposits, down payments, and closing expenses reside in their own accounts and can be documented. Have at least two months of bank statements on-hand. The statements should not display any odd transactions (such as deposits from unusual sources). Finally, when giving earnest money deposits for Advance NC home transactions, buyers should utilize money from personal accounts. If accepting money as a gift, ask your financing consultant for the correct steps before receiving those funds. These steps can minimize issues and lead to quicker mortgage approval.