Pre-approval Guide (1) - Flipbook - Page 11
Down payments
Where can my down payment come from?
For purchasing a primary residence, eligible sources of funds include (but are not
limited to): checking, savings, and other deposit accounts owned by the borrower(s);
401(k) plans and eligible retirement accounts; investment accounts such as stocks or
bonds; gift funds (monetary gifts from family members or close friends with appropriate
documentation); a gift of equity (where the seller provides a specified amount of equity
in the home with proper documentation); proceeds from selling personal property like a
vehicle (with necessary supporting documentation); or down payment assistance
programs.
Where can my down payment NOT come from?
Including but not limited to: Undocumented cash. Personal loans (can vary based upon
the loan program). Credit cards. Funds from a business account unless adequately
documented and approved by the lender. Proceeds from illegal activities. Unverified
gift funds.
IMPORTANT: Please talk to me about the source of your down payment funds before
depositing any amount outside of your usual payroll into your accounts. Additional
documentation and steps may be necessary.
If I recently paid o or paid down a debt, how long until that is reflected on
my credit?
The timing of when a creditor reports an updated balance or payment to credit bureaus
can vary. Typically, most creditors report every 30 days, so depending on when you
made your payment within that cycle, it may take 30 to 60 days to reflect. If you've
recently made a significant payment or settled a debt, be sure to inform me, as this
may affect your qualification status.
If I’m planning to make a large payment or pay off a loan, should I wait to
apply until after?
Considering that payment updates can take anywhere from 30 to 60 days, or even
longer in certain cases, I recommend not postponing your application to wait for an
improvement in your credit score. In fact, depending on factors like the age and type of
loan, as well as your personal credit history, paying off a debt may not necessarily boost
your score or be the best option. Sometimes, it could be more beneficial to use those
funds towards your down payment instead of clearing debts. Since each situation is
different, I strongly suggest applying and discussing your plans before addressing
significant debts. We can conduct a
