No matter where you are at in the home buying process and how much money you are putting down, where your down payment comes from matters!
Did you know that all the funds that you use to purchase a home has to come from a documentable source? That means bank accounts, retirement accounts, paychecks, trust funds, etc.
I know that most of you that pull money from retirement accounts have a full understanding of the penalties and costs involved. But, be sure to have a good understanding of how long it will take them to release the funds to you. Some retirement accounts don’t allow you actual access to your funds as quickly as they would lead you to believe.
No bank is going to allow you to use undocumented funds to purchase a home. That means NO Money can be used that is sitting in your safe, your mattress, your golf bag, or any other choice hiding spot for it.
Your lender is going to be looking for 2 or 3 bank statements that show that you have the funds available. You do not want any of those bank statements showing a large undocumented deposit. So, if you have funds in the mattress you want to get that money into the account so that it can season.
You can continue to add to that account if the funds are coming from a documented source. Paycheck or something of that nature.
Just a side note, it may take you a little time. Banks don’t look too kindly on large undocumented deposits either. Sometimes they will fingerprint you as you are making them. They will report it to the IRS and a lot of times they will hold your funds for a specific amount of time. So be sure to check with your financial institution of choice to see what their regulations are.
If you do not have time for that, as you are already committed to a home,you may need to look for a family member that is willing to help you and loan you the dollar amount that you need.
You can, of course, swap them on the back end and give them back the funds they are loaning you. Just be aware that they will have to supply a few bank statements as well to prove that the money is seasoned and coming from a documented source. Make sure they are willing to do that prior to committing to that source, as I have seen that bite a few buyers in the past.
Any questions please feel free to contact one of our lenders and they will be happy to help guide you through the process of getting your down payment documented prior to you actually needing it.
If you need assistance with where you want to pull your down payment from, you have options. They can help you with that as well.
Thank You for reading and happy house shopping! We are here to help you with all of your real estate needs.Social tagging: down payment > first time home buyer > home buying tips