Mortgage Down Payment

by Lesa from Illinois

Hi Kate, If I disclose 2 sources for my mortgage down payment on my loan application, must I use the money from those sources? Or can I use money from another source for the mortgage down payment and closing costs? Lesa

Kate Answers: Mortgage Down Payment Question

Dear Lesa, Mortgage approvals are initially based on the information you provide on the uniform residential loan application. Then the information is verified at least two different ways.

First of all, a loan applicant is asked to provide paperwork to source a mortgage down payment. Bank statements are a typical request. If you are receiving gifted money from a relative, depending on the type of home loan program, the donor could also be asked to provide source documentation.

As one of the last steps, commonly home buyers are asked for withdrawal slips or copies of cashier's checks to show the mortgage down payment was withdrawn from the designated accounts.

Will mortgage companies always ask for bank statements, gift verification, or copies of cashier's checks? No, not always. But to be on the safe side, I recommend you are prepared. Wouldn't it be disappointing to be asked for additional mortgage down payment documentation right before closing on your house that you weren't expecting to provide?

This is why mortgage pre approval is crucial to a successful home buying process. Think of it as your dress rehearsal, an opportunity to iron out the wrinkles before you are under the pressure of a contract deadline.

Prime Real Estate Articles Tip No.45 on my website explains why lenders seem suspicious about mortgage down payments. No, it is not your imagination. They are! Pick up valuable information here because if you anticipate the questions, you can be prepared with answers and help your lender finish up your mortgage loan approval quickly and successfully.

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