How to keep your loan approved – Assets

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blog-author-clayjeffreys3

Continuing a series on how to keep your loan approved by avoiding things that can cause a delay in closing OR EVEN causing the loan to be denied.

Last time, we looked at three things to avoid when it pertains to qualifying income. Today, we’ll set our eyes on the assets needed for the loan approval.

When it comes to assets, we mainly focus on documenting all of the money coming in and out of a borrower’s accounts. As a mortgage loan originator, I must show that no one standing to benefit from the sale of the home gave the borrower/home buyer money to purchase the home. I also must show that any gift contributions given to our borrower/home buyer is from an acceptable gift source. Here we go!

  • Avoid making random and undocumented deposits in bank accounts: If you receive a check for $1,000 from a tax refund OR reimbursement from health insurance, make a copy of the check prior to the deposit. Then let me know so there is no confusion in underwriting. This way we avoid any potential delays in closing.
  • Document gift money correctly: When receiving gift money for a loan, I must document the transfer of funds with a gift letter, proof of funds given, and proof of funds received by my client. I also need to show the giver is an acceptable source for the loan program. FHA has looser requirements, but Conventional loans typically require the giver to be family to the borrower OR have a documented/established relationship. Without documenting the money correctly OR coming from an acceptable gift source, the closing could be delayed or even have the loan denied.
  • Don’t transfer large sums of money between bank accounts: Assuming the transfers are done between your own bank accounts, then at worst, this could cause a delay in closing as  we will need to go back to underwriting with your new provided bank statements showing it was your money. Why do you have to do this? Again, I have to show the money didn’t come from anyone standing to benefit from the sale of the home. If the money isn’t from your own accounts, then we have to go back to the second item listed here and document a gift.

Looking to buy a home, but planning on getting a gift from a family member? Expecting a quarterly bonus to show up, and you need that for the down payment? Worried these things may be difficult in the loan process? Don’t worry. I do this all the time. If you are buying in the state of Georgia, contact me today. I’ll instruct you on how to properly document the assets, and make sure this doesn’t cause a delay to our closing date.

Remember, let’s not make a mistake as we go through the process!

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