A critical step in the mortgage loan application process is to verify the sources for your down payment, closing costs and reserves.
Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.
Take extra care to document the sources for any monies to be used for the down payment or closing costs. Do not transfer large sums of money without first discussing with your mortgage consultant.
- Cash in a bank account
- Mutual funds / stocks / IRA / 401K
- Proceeds from the sale of another property
- Gift from an immediate relative
- Liquidation of any asset
- Borrow against an asset (401K)
If you are receiving a gift for the down payment, you will need to provide a gift letter, and we’ll need to verify the source, transfer and receipt of the gift funds.