So you want to purchase or refinance. Your credit is great. You have sufficient income and assets and you get bogged down by having to explain items to the bank. Here are a few things to remember while you are beginning the process.
A LARGE BANK DEPOSIT Lenders are required by federal regulators to confirm that funds in an account come from bona fide sources, like a gift from your grandmother for the down payment. What constitutes a large deposit? That is based partly on your income. If you earn $5,000 a month and deposit an extra $10,000 beyond your paycheck, that may be considered oversized. Of course, if you were just married and received a bounty of checks as gifts, you might want have your marriage license on hand as proof, when you are providing your bank account information.
YOUR ADDRESS If you are buying a primary home three hours from Manhattan yet list your employment with a Midtown company, your case may draw scrutiny. Likewise, a couple with three children who are buying a one-bedroom apartment may be scrutinized about whether this will be their principal home. Lenders want to make sure you’re the owner-occupant, not buying as a rental or to flip the property.
NEW OR UNDISCLOSED DEBTS When you’re in the process of buying a home, avoid taking on other debt. Buying a sofa or a furnace on credit could also slow or even scuttle your mortgage closing, depending on your situation, if it pushed your total debt levels beyond acceptable limits.
As with most mortgage items, all of these items are surmountable. Don't worry but be diligent.
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