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Qualifying: Asset Verification
Be Prepared to Show all Funds to Close
The lender will verify all funds used for down payment and closing costs. The lender will review all assets claimed on the loan application. They’ll need documentation and will also focus on recent bank deposits.
Be Prepared to Explain if a deposit appears on the statement which is not associated with the disclosed income sources for the borrowers on the loan application. This includes funds transfers from non-borrower accounts.
It’s Fannie Mae and FHA’s rule to account for the funds in order to ensure funds are not coming from a party with a financial interest in the transaction (like the seller) or from any illegal activity such as money laundering or terrorism.
– Cash Deposits are unaccountable and not considered acceptable funds.