Mortgage Tip: Down Payment
If you are considering purchasing a home in the future something to think about is your Down Payment. Not all loan programs require a down payment like USDA and VA which are 100% financing or FHA where the down payment can be a gift from family, but if you are going to put money down then something to keep in mind is “seasoning” (keeping money in your bank account for a specific period of time) the funds currently in your Savings or Checking account.
When going through the loan process the lender will need to see where you have the funds for your down payment. If they get your bank statements and see large CASH deposits they will not be able to count those unless those amounts can be sourced. For example, if you were to sell a car for cash or had cash in a safe at home that you wanted to use for part of the down payment and you deposited that into your bank account right as you were starting the loan process then those funds would not be available to use for your down payment. This is because they are not verifiable funds and we cannot prove where the cash came from. In order to avoid having any hold ups in your loan process go ahead and have those funds sitting in your account two months before you decide to start the mortgage loan process.
Lenders only want to see the past two months of your bank statements to see that the money has been in there at least that long. What causes issues is if there are large deposits that cannot be sourced from those two months of bank statements.
Just a helpful tip for people who are starting to think about purchasing a home in the future. If you have questions about down payments, loan programs, or any other home buying scenarios send me a PM.