Don’t Make That Big Deposit Or Transfer


You’ve probably heard the saying, “When you fail to plan, you plan to fail.” That is especially true when it comes to buying a home today. Underwriters are following strict guidelines–and that means even things like bank deposits and transfers are under scrutiny.

Here is some insight on how underwriters analyze bank statements…and what you need to know and do (or not do) during the loan process.

Today, lenders require an explanation and proof of source of funds for any large non-payroll deposits that are listed on a bank statement. The reason for the underwriter’s concern is that an applicant may be borrowing money from individuals, or accepting money from an interested party to the transaction, and this is not allowed unless disclosed.

It’s easy to see how this bank requirement can create a lot of frustration, especially for people who are used to moving money between their accounts, which many of us do today. The key thing to remember is that anyone applying for a mortgage should avoid transferring money between accounts or making large non-payroll deposits during the home buying or selling period. While that may feel like an inconvenience, the time and headache you’ll save yourself from having to account for all your deposits will be worth it.

If you do make deposits or transfers, the lender will need verification of where the money came from.  For this reason, never deposit cash in the months before or during the mortgage process.  There is no way to verify where cash came from, and so it may not be used toward the purchase of your new home.

Deposits may be verified with a copy of the transaction, which can easily be printed from your online banking account to show an image of the check that was deposited.  If a transfer was made from another account, those bank statements will be needed as well.
Let me know if you have any questions at all about this or if there’s anything I can do to help you at this time!

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