U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 1.5 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Jump to a detailed profile or search
site with Google Custom Search

Search Forums  (Advanced)
Business Search - 14 Million verified businesses
Search for:  near: 
Reply Start New Thread
 
Old 03-28-2010, 05:12 PM
 
Location: West Covina, CA
15 posts, read 101,045 times
Reputation: 17
Default In trouble with large deposit and FHA loan approval.

I'm two weeks away from closing and the bank are asking for a letter of explanation of a large cash deposit to my account. This cash deposits comes from my kids father, a self employed business onwer that voluntary provide $ for our kids expenses. This money is out of his business cash flow that I receive cash money from him on regular basis. This money goes towards kids expense and a car under his name he pays for it. It has nothing to do with my income or savings account to be use in the purchase of the home. The loan undwerwriter is asking the source of deposit. Can my loan be denied to do this issue?. I have an steady income from my job of 20 years, and my savings have been sitting in the bank for years. This cash is a voluntary agreedment between the two of us for the wellbeing of the kids. I've to write the letter of explanation tomorrow and I don't even know to start... I'm only two weeks away from closing and this red flag poped up on the lender........ please advice!.
any imputs is so much appreciated!.
Reply With Quote Quick reply to this message

 
Old 03-28-2010, 05:24 PM
 
Location: Salem, OR
10,674 posts, read 16,960,411 times
Reputation: 6518
Then just write in your letter that it is a child support payment and what you use that money for.
Reply With Quote Quick reply to this message
 
Old 03-28-2010, 05:44 PM
 
Location: West Covina, CA
15 posts, read 101,045 times
Reputation: 17
I'm concerned that because it's cash deposits it will become an issue and they will denied my loan.
Reply With Quote Quick reply to this message
 
Old 03-28-2010, 07:21 PM
 
Location: Salem, OR
10,674 posts, read 16,960,411 times
Reputation: 6518
Quote:
Originally Posted by Millieb38 View Post
I'm concerned that because it's cash deposits it will become an issue and they will denied my loan.
If you can't give them a paper trail it is very possible they will deny the loan. Cash doesn't matter as long as you can show them where the money came from. So your hubby would need to write something for you saying that he give you cash from his business for child support.

I'm thinking you are going to have a problem because I'm not seeing a great paper trail from what you describe.
Reply With Quote Quick reply to this message
 
Old 03-28-2010, 07:32 PM
 
Location: West Covina, CA
15 posts, read 101,045 times
Reputation: 17
Having him writing a letter is not a problem, cash money does comes from his business and there are daily sales to justify income. But can they still denied the loan to do this issue? I mean, my income to purchase the home has nothing to do with this money. I have a based montly salary on a 20 year job. I have enogh savings to cover my mortgate for a year or so and that money has been sitting in the bank for years...... do you believe I can have deniel?
Reply With Quote Quick reply to this message
 
Old 03-28-2010, 07:38 PM
 
Location: Austin
4,153 posts, read 7,213,692 times
Reputation: 3128
Yes, your loan can be denied because of this issue. Lenders can deny loans for whatever reason they want these days, but large deposits are a big one if you can track them. What I would suggest is to provide previous bank statements showing the same and or similar, consistent amounts along with the explanation so they can see a pattern.

What they're trying to find out is if money was "gifted" to you, and if it was, you will need a Gift Letter. Your letter of explanation can be 2 sentences or it can be 2 pages. Just say, straight to the point, what the money is for and show the pattern.
Reply With Quote Quick reply to this message
 
Old 03-28-2010, 08:32 PM
 
Location: Northern, VA
980 posts, read 1,930,652 times
Reputation: 519
Tell the truth. Since you say everything is on the up and up, you have nothing to worry about.

Quote:
Originally Posted by Millieb38 View Post
I'm two weeks away from closing and the bank are asking for a letter of explanation of a large cash deposit to my account. This cash deposits comes from my kids father, a self employed business onwer that voluntary provide $ for our kids expenses. This money is out of his business cash flow that I receive cash money from him on regular basis. This money goes towards kids expense and a car under his name he pays for it. It has nothing to do with my income or savings account to be use in the purchase of the home. The loan undwerwriter is asking the source of deposit. Can my loan be denied to do this issue?. I have an steady income from my job of 20 years, and my savings have been sitting in the bank for years. This cash is a voluntary agreedment between the two of us for the wellbeing of the kids. I've to write the letter of explanation tomorrow and I don't even know to start... I'm only two weeks away from closing and this red flag poped up on the lender........ please advice!.
any imputs is so much appreciated!.
Reply With Quote Quick reply to this message
 
Old 03-28-2010, 09:05 PM
 
Location: West Covina, CA
15 posts, read 101,045 times
Reputation: 17
OMG this banking thing is sooo stressfull... I do have consistent deposits for previous months in differents amounts of $, it is not a gift....This money is part of his income but since he's a self-employed is not a business check. If I only knew this was gonna cause such a big impact I'll have not deposited this money until after closing.....I just hoping I don't get turn down due to this issue :-(. Thank you all for suggestions. Should I just explain where the money comes from and wait for thier response or should I send a letter from him stating he does provides me an extra income for kids support and so on? Thank you so very much for you imputs they're very helpful.
Reply With Quote Quick reply to this message
 
Old 03-29-2010, 09:48 AM
 
Location: Austin
4,153 posts, read 7,213,692 times
Reputation: 3128
Quote:
Originally Posted by Millieb38 View Post
OMG this banking thing is sooo stressfull... I do have consistent deposits for previous months in differents amounts of $, it is not a gift....This money is part of his income but since he's a self-employed is not a business check. If I only knew this was gonna cause such a big impact I'll have not deposited this money until after closing.....I just hoping I don't get turn down due to this issue :-(. Thank you all for suggestions. Should I just explain where the money comes from and wait for thier response or should I send a letter from him stating he does provides me an extra income for kids support and so on? Thank you so very much for you imputs they're very helpful.
At this point, your lender doesn't care about a letter from him. They want a letter from you. Explain what I already mentioned, send in your bank statements showing the pattern of lump sum deposits, and then if they ask for a letter from him, provide it, but right now, they only care about you.
Reply With Quote Quick reply to this message
 
Old 04-18-2010, 11:19 PM
 
Location: West Covina, CA
15 posts, read 101,045 times
Reputation: 17
I submitted the letter of explanation and a pattern on previous deposit and it was just fine. After many many other letters of explanations I finaly got the final approval this friday. Signing will take place sometime this week. thank you for you imputs.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $79,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads

All times are GMT -6.

2005-2014, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 - Top