Verifying Your Assts For
The Down Payment
Closing Costs

A critical step in the mortgage loan application process is to verify the sources for your down payment, closing costs and assets. 

Down Payment & Closing Costs

Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.

Take extra care to document the sources for any monies to be used for the down payment or closing costs.

Acceptable Down Payment & Closing Costs Sources

• Cash in bank accounts - 2 Months of Statements
• Stocks, bonds, mutual funds, 401K and retirement accounts - Quarterly or 2 months of Statements
• Retirment Loans - Evidence of withdrawal and terms of repayment
• Proceeds from the sale of another property - Final HUD
• Gifts - Gift letter, evidence of the Donor's Ability to provide funds (i.e. a copy of the bank statement from the donor) and evidence of receipt of transfer of funds.
  
   

Important Note:

Don't switch banks or move money around. As we review your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets.

To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds.

Also, any large desposits will need to be documented with a complete paper trail. This is to verify that the large deposits were not borrowed funds.