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. It is important to know if the downpayment will be coming from your own funds or a gift from relatives. There are certain steps that have to be taken for each of these options. Sometimes one can include the closing fees in with the sale price of the home. There are many options to help you get into that dream home or refinance your house!  

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. There are other options available without a downpayment to help you purchase your home. Many individuals come to closing without any money down and the sellers pay all the closing costs! Ask your Loan Officer about how this can work with the financing options today.

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, personal accounts

• Life insurance

• Personal property estimate - cars, boats, antiques, jewelry, gold, silver 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. tax returns and or paycheck stubs are the most used forms. 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. When we run your credit report we will verify with you the debts that are listed. Please call if you have any questions!