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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.
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