Since underwriting standards have become much tighter you may not be aware that you will have to pay close attention to the deposits you are putting into your accounts. Most people now tell me we have never had to do this before. My reply is, “you are correct you did not.” This is not the case anymore. Underwriting needs to know that you did not get a loan from someone or some place that has undisclosed debts that are not being calculated into your DTI (Debt to Income) ratio for the purpose of qualifying for the loan.
Here is what you will want to do and pay attention to. If you follow these directions you will make your process of getting a mortgage much more enjoyable, but if you do not follow them you will make your mortgage process a bit more frustrating than it needs to be. This is probably the biggest thing I find most of my borrowers having trouble grasping initially. Maybe they just forget or maybe they just don’t think it is as serious as I say.
Every deposit within the past two statement cycles from when you start the qualification process must be documented or “paper trailed.” This is completed by making a copy of your check that you are depositing and making a copy of the deposit receipt from the bank when you put it into your account. Your pay stubs or pay statements are the easiest ones. Many people will have an auto deposit so a deposit receipt won’t be required. You will just need a copy of your statement with a copy of your pay stub. Keep all your pay stubs until you are closed on your loan. If you get any other checks or let’s just say you sell a vehicle you may need some additional documentation. I would highly recommend you speak to your mortgage professional to discuss what additional documentation you will need for the underwriter. This can vary slightly between situations and underwriters.
If you have cash deposits they are not able to be paper trailed. Therefore, don’t put them into your bank accounts as they will most likely not qualify for funds you can use to close. I would recommend discussing what you should do with your mortgage professional regarding any cash you have on hand.
Here are some more very IMPORTANT notes to this process of getting a mortgage. If you pay attention to these details it will make the mortgage process much less frustrating.
If you have any questions, please feel free to give me a call. Thanks for reading!