Tuesday, January 8, 2013

Verification of Funds – The Hot Button Issue of 2013

Verification of Funds – The Hot Button Issue of 2013

Funds verification requirements can be very frustrating for borrowers applying for mortgage loans today.  Here are some tips to help you prepare and avoid frustration … These tips apply to any account that you will provide to your loan officer as part of your application.

  1. Start planning 30 to 60 days before you apply (we will require your last 2 month’s bank/brokerage statements).  
  2. Any deposits to your account that are not “Direct” deposits for payroll, social security, retirement, etc. will need to be verified*.
  3. Funds transfers – if you transfer funds from Account A into Account B (and Account B is provided to the lender), you will have to provide a statement from Account A showing the funds transfer and a 30 day history.  If there are deposits showing in Account A they will need to be verified*.  
  4. Earnest Money Deposits (EMD) Purchase loans – Your EMD must be verified prior to closing – you will be required to provide a copy of the cancelled check (front and back) along with a 30 day statement showing the check clearing your account. 

* Verified means – a copy of the check (front and back) with a written explanation of what it represents.

Working with the right Loan Officer, who understands these guidelines, can make all the difference in creating a smooth transaction.  

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