Mattress Money and other funds used to purchase a home
With vigilant focus on the source of funds for closing mortgage loans, its important to know what’s acceptable. Here’s what you need to know and what you will need to provide:
Or any “cash on hand” is not acceptable. All funds must be “seasoned,” which means your money needs to be in an institutional bank account (bank, credit union, brokerage, etc.) You will need to provide all pages of up to three months of bank statements for proof that these funds are yours.
Are okay with a signed “gift letter” (a form your lender should provide) and evidence of the donor’s ability (a statement showing sufficient funds.) Later, your lender will need copies of the check, deposit slip, and account statement to show the transfer into your account.
Assets Being Sold
Such as a car, boat, collectible, or anything of value you are selling, require proof of ownership (such as registration or title) and evidence of value (blue book value or appraisal.) After the sale, provide copies of the receipt and the check and deposit slip showing the transfer of funds into your account.
Include loans from employers or against retirement savings, grants, inheritances, proceeds of sale from other property, loan paybacks and winnings. Be prepared to show the source of funds, evidence of transfer into your account, and any supporting documentation of value, terms, service provided, etc.
If you have time and want to minimize paperwork, consolidate all funds into one account at least two or three months before you anticipate closing on your new house. Save any and all evidence of the transfer and deposits, and keep activity to a minimum.