Account Activities Matter When
Applying for your Chicagoland Mortgage
Almost all Mortgage Lenders require that Loan Applicants submit each and every page of their Bank Statement, Investment Account, and Retirement Fund (showing source of Down Payment), not just a first page.
And note: That's even if a page in the statement's sequence is only numbered and blank (something that trips-up many Applicants).
There are several reasons ... but the following are the issues that most commonly trigger Lenders' requests for full statement/documentation:
- "Large" deposits from Income/Payroll Transfers, as well as deposits made frequently from other accounts, cash, etc. (Tip: Avoid making cash deposits into accounts at all costs!)
- Having to identify sources of deposits. (Deposits direct from Payroll, Social Security, transfers from other accounts, "non-descript" deposits, check deposits, or wire transfers)
- Automatic monthly payments for recurring debt
- Proof of Earnest Money Checks clearing the account. (This is almost always verified on PURCHASE transactions)
- Proof of Gift Money received (If applicable)
- Proof of Consistency/Timeliness of payments for Rent or Housing
- Type of expenditures (ability to manage funds or budgets)
It's not-uncommon for me to be questioned by my Chicagoland Borrowers regarding these requests, as Borrowers want to know ...
"Why do Underwriters need to know WHERE my Down Payment and Closing Funds come from? Isn't the fact that I have the money enough?"
But look at all the scenarios and concerns Mortgage Underwriters must consider regarding these funds and their place of origin:
- A Borrower takes out a Personal Loan, Signature Loan, or a Credit Card Advance to fund their Down Payment or to be able to Close their loan. (More debt is incurred in these instances and that can affect a Borrower's ability to repay their Mortgage)
- A "gift" of funds is received from a relative, etc., but is in reality a loan where funds will need to be repaid.
- The funds come from a new or "unreported" loan secured by other Real Estate Owned by the Borrower (such as a Home Equity Line of Credit)
- A Borrower will be increasing their Housing Payment by a significant amount ... or will be depleting all of their liquid assets for Down Payment and Closing Costs.
- The funds for Down Payment entered a Borrower's Account in the last 60 days. (A huge red flag for Underwriters, as they need to know WHERE those funds came from.)
Potential Chicagoland Borrowers and current Mortgage Applicants must be aware: Statements from their Bank, Investment Account, and Retirement Fund will be requested of them, then reviewed very carefully (in their entirety) by Mortgage Underwriters.
Because of this fact, it's wise for Borrowers to: Make it a habit to fully-document, save, and organize financial records as they head towards the time for Mortgage Pre-Qualification and then subsequent Mortgage Application. It's also wise to limit the number of transfers of funds they make between accounts.
By practicing the above suggestions, Borrowers insure that they can fulfill any requests received by Underwriters quickly and easily ...
* Hoping to Buy or Refinance a home in New Lenox, Will County, the greater Chicagoland area, or Wisconsin? Contact Me today! I'll be happy to put my 37 years of mortgage experience and expertise hard to work on your behalf.
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American Portfolio Mortgage Corp.
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Gene Mundt, Mortgage Lender, a Lender with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.
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