CT Hancock, Mortgage Advisor with Coldwell Banker Mortgage, advises us verifying funds for down payment and/or closing costs and documenting their source is a crucial part of the loan process.
There are two kinds of your money that must be documented correctly:
1. Money you already have – needs to be documenting by providing statements.
2. Money to be acquired – during the loan process such as gift funds, sale of property, etc. requires specific and detailed documentation and should be discussed with your Mortgage Advisor prior to receipt and depot of funds.
CT Hancock offered us 7 quick tips for documenting assets:
1. Deposit statements of all kinds, checking, savings, money market, 401K, etc. must cover at least 30 days of activity, and must be complete with all numbered pages provided.
2. Statements should have a beginning date and beginning balance, and ending or cut-off date and ending balance, with 30 days of activity or account history detailed.
3. Must have institution name in the form of business logo. Cannot be typed at the top of document.
4. If document does not have business logo, then it must have a secure web address clearly visible at the top or bottom of the page containing the name of the deposit institution of each page must be stamped with the business name and signed by a representative (teller, customer service, personal banker, etc.).
5. All large deposits (greater than $100) should be documented and explained. This will customarily involve copies of deposit slips, possibly cancelled checks, receipts, bill of sale, property titles and may also include additional account statements in the case of money transfers. Also, expect to write a brief explanation to accompany the above documents and reference them back to the statements on which the deposits appear.
6. Avoid cash deposits during the home shopping/loan processing time frame, as these are almost impossible to document and are generally considered to be non-allowable source of funds for down payment.
7. Best practice is to have all down payment funds on deposit in one account prior to shopping for a home and avoid transferring money in or out of that account until need for earnest money and closing.
Consumers, if you follow these tips when documenting your assets for a mortgage you will find the process will go much smoother. It has to be done so take time to methodically document and the sooner you provide the paperwork to your lender the sooner the loan can be processed.
P.S. If having a new home in on your Christmas list, just call Dorie Dillard. Whether you need to buy or sell a NW Austin area home, I can help!
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