|
Verifying Your Down Payment,
Closing Costs, Assets, Income and Debts
A
critical step
in the mortgage loan application process is to verify the sources for your
down payment, closing costs and assets, as well as documenting income and
debts. The lender uses this step to determine your qualifications as a
borrower.
Down Payment & Closing
Costs
Documenting that the down payment comes from your savings and that you will
have savings and/or assets over and above the down payment gives the lender
confidence in your strength as a borrower and your ability to repay the
loan.
Take
extra care to document the sources for any monies to be used for the down
payment or closing costs.
Acceptable Down Payment
& Closing Costs Sources
-
Cash in a bank
account
-
Mutual funds / stocks
/ IRA / 401K
-
Proceeds from the
sale of another property
-
Gift from an
immediate relative
Assets
Collect information about
your personal assets that add to your net worth and help to prove your
credit worthiness.
Common
Assets Considered in a Mortgage Loan Application
-
Stocks, bonds, mutual
funds, 401K and retirement accounts
-
Life insurance
-
Personal property
estimate - cars, boats, antiques, jewelry, etc.
-
Other real estate or
property
Income and Employment
The
lender will want to confirm your current gross income and have evidence of
stable employment. Documentation requirements vary depending upon a number
of factors - including the source of income (hourly, salary, salary +
bonuses, salary + commission, commission, self-employed, etc.).
Debts
Your
lender will want to review a list of all your current debts. This along with
your credit report will provide the lender with a snapshot of your
obligations. The lender will want to confirm that you will not be
overextended when the mortgage payment is added to your current debt load. |