Home Buyer: What is an Acceptable Source of Cash to Close?
With vigilant focus on the source of cash for closing on your mortgage loan, it’s important to know what’s acceptable for mortgage lending. Here is what you need to know and what you will need to provide in order to prove where funds originated from.
Mattress Money or any “cash on hand” is not acceptable. All funds must be “seasoned”, which means your money needs to be in an institutional account (bank, credit union, brokerage, etc.) You will need to provide all pages of up to two months of consecutive statements for proof that these funds are yours.
Gift Funds are OK with a signed “gift letter” (a form we will provide) and evidence of the donor’s ability one month bank statement showing sufficient funds). Later, we will need copies of the check, deposit slip and account statement to show the transfer into your account.
Assets Being Sold, such as a car, boat, collectible items or anything of value you are selling will require poof of ownership (such as registration or title) and evidence of value. After the sale, provide copies of the receipt and the check and deposit slip showing the transfer of funds to your account.
Other Examples include loans from employers or against retirement savings, grants, inheritances, proceeds of sale from other property, loan paybacks and winnings. Be prepared to show the source of funds, evidence of transfer into your bank account and any supporting documentation of value, terms, service provided, etc.
TIP: If you have time and want to minimize paperwork, consolidate all funds into one account at least two months prior to closing. Save any and all evidence of transference and deposits, and keep activity to a minimum.
Always remember never hesitate to ask questions when you are unsure about what will work and what will not work.
If you have any questions on what source of cash to close on your home will be accepted, contact us today for further explaination. With three offices located in Lee County and Collier County area: Naples, Fort Myers, Cape Coral and Lehigh Acres we are here to help.
Contact us today for your free consultation.