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We are under contract on a home and closing is set for mid March. We have the savings for the required down payment, and we have the lender paying part of the closing costs, but there may still be about $6000.00 we will need in closing costs, which we plan on using our tax return for. My question is I've read that the bank will require to see your proof of funds for closing? And that those funds might have to be "seasoned"? Our taxes will probably not be in the bank until possibly mid February and we are closing mid March, can anyone tell me if that could raise an issue?
On another note, we are still jumping through hoops to provide the underwriter with tons of information they are requesting, I just found out that my student loans that are currently in deferment will eventually be about $420 a month when not in any kind of repayment plan (though they will be for quite a while) I'm wondering if this is something that could keep me from getting my mortgage now?! Since this is quite a large payment and we are already almost at our max for our loan/mortgage payment. TIA for any advice!
You'll probably need to document the source of the money for the tax refund...and your student loans could be an issue. It sounds like you're cutting it rather close as to how much you can afford to buy. The underwriter might be doing you a favor if they turn you down.
Tax Return - Could be a problem if you need the $6000 as a reserve versus a closing cost. If your seasoned cash is enough for the reserve then that is not an issue. You need to submit your tax returns, a copy of the check if you get one mailed, a letter stating that is where is is from, a copy of the receipt of the deposit. If your next bank statement comes out before closing, be ready to submit that too. Be careful of making other large mattress money deposits into that account. If it is an electronic deposit, ask a teller to print out a recent transaction that include your bank account number.
Some additional advice, make a budget with your $420 student loan payment. Lets say you pay 25% into taxes now you are left with 75% lets say you are maxed out at 43%, now left with 32% of your original income. Now subtract $5000 a year from what you have left. How much does that leave you for your utilities, car payment and insurance, food, medical insurance, dental insurance, retirement savings, child care if or when you have one, major repairs on your house.
Last edited by thelopez2; 01-25-2014 at 06:56 AM..
We are under contract on a home and closing is set for mid March. We have the savings for the required down payment, and we have the lender paying part of the closing costs, but there may still be about $6000.00 we will need in closing costs, which we plan on using our tax return for. My question is I've read that the bank will require to see your proof of funds for closing? And that those funds might have to be "seasoned"? Our taxes will probably not be in the bank until possibly mid February and we are closing mid March, can anyone tell me if that could raise an issue?
On another note, we are still jumping through hoops to provide the underwriter with tons of information they are requesting, I just found out that my student loans that are currently in deferment will eventually be about $420 a month when not in any kind of repayment plan (though they will be for quite a while) I'm wondering if this is something that could keep me from getting my mortgage now?! Since this is quite a large payment and we are already almost at our max for our loan/mortgage payment. TIA for any advice!
Don't worry about the tax return funds. As long as you have them in time, just keep a copy of the check. The student loans must be in deferment for a full year from the closing date or the payment will be held against you in the debt ratio.
Remember, every lender has different rules / overlays (i hate that word, lol)
If the student loans are in deferment but scheduled to be out in 2-3 years the lender will calculate a worse case scenario payment unless you can show documentation showing exactly what the payments will be.
Your tax refund does not fall into the seasoning rule as you have proof of exactly where it came from. It came from funds earned through the 2013 year of employment.
Is this a big bank? (Wells, BofA ect) ? It sounds like it. The big banks are making it harder and harder. Stick to a mortgage company.
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