Documenting large deposits on bank statements has been a royal pain in the behind for many borrowers going through the mortgage process. I am very pleased to share with you that Freddie Mac has updated guidelines that lenders, including Mortgage Master, are embracing.
Current guidelines have lenders documenting large deposits that are not easily identified on a bank statement. Direct deposits from employers or the government (IRS refund, etc.), for example, do not need to be sourced or documented. However, deposits over $1,000 may require a borrower to show documentation (proof) of where those funds came from.
Freddie Mac’s guidelines may only require proof of large deposits when those deposits are more than 50% of the borrowers monthly gross income.
This is a huge improvement…however, when funds for closing are required (down payment, closing cost, etc.), an underwriter may still require proof of deposits in order to make sure the funds are not borrowed. Gift funds still need to be documented – this is not the time to borrow a bunch of dough from Uncle Vinnie and expect to not have to document the funds. The Underwriter still has the final say.
If you are considering buying a home or refinancing a home located anywhere in Washington state, I’m happy to help you! Please click here if you would like me to provide you with a mortgage rate quote.
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