Midland Mortgage Corporation: ELIGIBLE FUNDS FOR THE MORTGAGE TRANSACTION OR CLOSING You might have the money in the bank, but it isn’t that simple. A lender will still want to know who the funds belong to, and how the money got there. And if you can’t document these things, your mortgage could get delayed — or denied. IF any deposit is more than 25% of your monthly income… THEN monies will have to be sourced with a clear letter of explanation and documentation. If the source of a large deposit is readily identifiable on the account statement, such as a direct deposit from an employer (payroll), the Social Security Administration, or IRS or state income tax refund, and the source of the deposit is printed on the statement, the lender does not need to obtain further explanation or documentation. IF any deposits are less than 25% of your monthly income... THEN these funds can be used in the loan transaction, although the consumer may be asked to explain where the funds originated. However, no paper trailing will be required. IF a deposit is a gift… THEN the person giving the gift needs to show on paper a clear ability for them to gift money to the recipient. In other words, a friend of the person giving the gift can’t make a deposit in the giftor’s account without getting a clear and concise explanation including a gift letter and subsequent paper trail with bank statements showing where the funds originated and where the funds ended up.
Posted on: Thu, 12 Sep 2013 19:18:49 +0000
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