Do-Nots Before Buying a Home

Lenders will review loan packages prior to approval and the main factors they are concerned with are the source of funds for down-payment and closing costs. Almost certainly, they will ask for the last two or three month statements of assets. These include checking accounts, savings accounts, certificates of deposit, investment and stock statements, and even 401K and retirement accounts.

Consequently if a buyer has been moving money between during a period of time before loan approval, the mortgage underwriter, or loan approval officer, will likely require a complete paper trail of all withdrawals and deposits. They will also required copies of cancelled checks, deposit receipts, and other pertinent financial information which could get wearisome.

This may seem frustrating, but the lenders are really only doing precisely their jobs. They must ensure quality control and reduce possible fraud, so it’s a prerequisite on most loans to entirely document sources of all funds.

So again, by moving money around, even if in an attempt to consolidate funds to make it simpler could in the end make it more challenging for the lender to properly document records to ensure the file’s accuracy.

So it is best to leave your money where it is until discussing it with a loan officer and or your Realtor. Although your Realtor will likely recommend the same and refer you to your lender, they want to ensure the process goes as smoothly as possible for you.



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