This has been a source of misunderstanding for many due to recent underwriting guideline changes.
Please read this!!!
It’s not as simple as showing the money. Lenders need to “paper trail” everything. This is due to recent guideline tightening. Lenders have to over-document to avoid the the impression of “making loans to people who cannot afford to make the payments". Underwriters, mortgage brokers, and borrowers have to provide paper trail for everything.
Below are a few key points:
“Paper trail” = source monthly statement, screen shot of transferring out, copy of check, destination monthly statement, screen shot of transferring in,
Down Payment: cannot be borrowed, but can be gifted (guidelines apply)
Liquid assets: checking, savings, money market
Non-liquid Assets: stocks, mutual funds, CD’s, etc. these need to be liquidated and funds deposited into “liquid” accounts.
Large deposits: explain with letter and document with source of funds,
On-line print outs: need to show account number and owner names and all detailed transactions since last monthly statement
Bringing checks to close? Funds must be drawn from a qualified account which was documented in underwriting. If drawing from multiple accounts, all accounts must be documented. Also, if consolidating funds prior to withdrawing them, documentation must be provided which paper trails the movement of funds.