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Just a curiosity questions here. When applying for a loan, if you have a recent large deposit, say like $25000, why does the bank want proof of where these funds come from. Why do they care?
Mine was a gift, i have to do a gift affidavit. Just wondering whats the different where it comes from.
I know it seems crazy, but not everyone is honest about the source of their money.
If large deposits were borrowed (meaning you have to pay it back), it has a significant impact on your ability to make mortgage payments. Don't you think?
Sounds like you would have loved Countrywide and their lending standards.
I know it seems crazy, but not everyone is honest about the source of their money.
If large deposits were borrowed (meaning you have to pay it back), it has a significant impact on your ability to make mortgage payments. Don't you think?
Sounds like you would have loved Countrywide and their lending standards.
Ah, makes sense now. I have never thought like a loan shark before , but yeah I can see that if this deposit was actually a loan then it should not be counted as assets.
Ah, makes sense now. I have never thought like a loan shark before , but yeah I can see that if this deposit was actually a loan then it should not be counted as assets.
got it.
Or if it came from selling crack that may be important information for the bank to know as well.
The bigger part of the picture is that on FHA, you are allowed to obtain a "gift" to buy a house for any amount of the down payment and closing costs. On a conventional, you must have at least 5% of your own money before a "gift" is allowed. They want to make sure you're using your own money to buy the house.
Another 2 reasons for having to document the source of the large deposits:
* It's required by Federal statute for loans that are backed by the government that all deposits over $1,000 are sourced and documented
* Part of the loan program you are going through might require that a certain percentage of the down payment came directly from your earned funds. I view it as the banks want to make sure you have skin in the game and arent just passing through funds that were gifted to you.
I just went through a series of back and forths with our mortgage broker regarding a number of cash deposits between $1k & $5k that were made in our accounts that were gifts for post-purchase renovations. The program we are going through provides up to 100% LTV, however, the buyer must put at least $1,000 of their own funds into the transaction at closing. In the end it wasn't a huge deal as we had more than sufficient funds in our bank accounts to cover the $3,500 we had put into the transaction that could be directly sourced from my salary.
How's this for nonsense? We recently closed on a conventional loan. We had a sizeable downpayment (greater than 50% of home price) consisting of equity from a previous home and liquidation of some mutual funds. At application provided proof of the mutual funds and the equity which was parked in a savings account (and the HUD-1 showing how much we netted from home sale). After closing, the bank sold our loan. New bank wanted to see "where the money came from." Thinking they were concerned that the mutual fund money came from a gift, I gave them copies of my year-end statements from last year showing the same # of shares. Oh no, not good enough. I had to show statements where the mutual funds were liquidated (we did this after the loan application) AND bank statements showing where we deposited the mutual fund money into our checking account. I gave them the first page of the bank statements with the recap of the month's business, and the pages which listed each deposit but didn't give them the pages with all my checks and debit card transaction detail, since I didn't think it had anything to do with "where the money came from" and wasn't any of their damn business where I was spending my "other" money - remember, this was after closing. But they kept after me so I finally just gave the whole statement because I was so sick of hearing from them and there was some statement we signed during closing that we would "cooperate fully with documentation if loan was sold" and would be liable for all legal fees associated with any non-cooperation.
The loan was sold to BB&T in North Carolina. I'd steer clear of these clowns if you can avoid it.
How's this for nonsense? We recently closed on a conventional loan. We had a sizeable downpayment (greater than 50% of home price) consisting of equity from a previous home and liquidation of some mutual funds. At application provided proof of the mutual funds and the equity which was parked in a savings account (and the HUD-1 showing how much we netted from home sale). After closing, the bank sold our loan. New bank wanted to see "where the money came from." Thinking they were concerned that the mutual fund money came from a gift, I gave them copies of my year-end statements from last year showing the same # of shares. Oh no, not good enough. I had to show statements where the mutual funds were liquidated (we did this after the loan application) AND bank statements showing where we deposited the mutual fund money into our checking account. I gave them the first page of the bank statements with the recap of the month's business, and the pages which listed each deposit but didn't give them the pages with all my checks and debit card transaction detail, since I didn't think it had anything to do with "where the money came from" and wasn't any of their damn business where I was spending my "other" money - remember, this was after closing. But they kept after me so I finally just gave the whole statement because I was so sick of hearing from them and there was some statement we signed during closing that we would "cooperate fully with documentation if loan was sold" and would be liable for all legal fees associated with any non-cooperation.
The loan was sold to BB&T in North Carolina. I'd steer clear of these clowns if you can avoid it.
I find it hilarious when a bank who buys a loan does a high degree of due diligence on the viability of the note, you take "issue" with it... even when you specifically say yourself that you signed over permission for them to do so.
Seems real backwards to me and something that only confirms I'm glad that I bank with BB&T instead of the real TBTF clown banks.
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, but yeah I can see that if this deposit was actually a loan then it should not be counted as assets.
