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Mortgage Guidelines

The following list is a brief review of acceptable sources for the down payment on a mortgage.

• Cash and Unsecured Debt – Any deposits that cannot be documented, originated from cash, or borrowed on unsecured debt, such as: credit cards or personal loans cannot be used towards the purchase of a house.

• Checking and Savings Accounts – Your lender will require and review your last two months checking and savings account statements. If there are any large deposits made on these statements, you will be required to document the source of these funds. Acceptable large deposits include, but are not limited to: paychecks, reimbursements, tax refunds, sale or liquidation of asset accounts, and transfer of funds from one account to another. These large deposits will require a thorough paper trail to document the source of the funds. Unacceptable sources of large deposits include: cash, unsecured loans, and credit card withdrawals.

• Retirement Accounts – If you are using funds from a 401(k) or retirement account as part of your down payment, you will be required to document the withdrawal from the account(s) as well as the deposit into your checking or savings account(s).

• Gifts – Gift funds are allowed on some loan types depending on your credit score. Typically, gifts are only acceptable if they are from a family member. They require a fully completed gift letter that shows the relationship of the donor. The gift letter should also include their contact information and the amount of the gift. The person gifting the monies will have to show their most recent bank statement documenting the withdrawal of the gift funds. In addition, the lender will require a copy of the gift check and a printout of your bank statement showing the deposit and new balance.

• Down Payment Assistance – There are many sources for down payment assistance. Prior to entering into a purchase agreement, it is important to discuss your options with your lender to make sure that you qualify for down payment assistance based on your income and your credit scores.