How to Qualify For A Mortgage With Un-sourced Down payment?
Saving up for a down payment and closing cost can be challenging if you do not know how to source or prove the money being used! Determining the acceptable or allowable sources of down payment and closing cost upfront can save your lot of time when qualifying for a mortgage. In the mortgage world, If you cannot source your cash then cash is usually called mattress money.
How Can You Source Cash Deposits?
Sourcing cash deposits means proving where they came from. How you source the deposit will depend on the lender or type of loan you get. Here are some examples of ways to source your cash deposit:
- 25% down payment with a Gift letter along with deposit slip.
- Invoices or bill or sale
- Copy of a title transfer along with a bill of sale
- Pay stubs or invoices
- Contract with a break down of deposit dates.
- Letter of explanation from a licensed attorney
- Signed letter from the person who provided funds
- Gift letter signed and dated by the donor and receiver along with a statement showing the money coming out of the donors account.
How to Get A Mortgage Using Cryptocurrency such as Bitcoin, Ethereum, Litecoin For Down Payment?
If you have funds in crypto currency such as Bitcoin, Ehereum, Litecoin that equal to at least 25% down payment in US Dollars then we can help. Most mortgage lenders will require to to source your down payment and closing cost. Cryptocurrency which is nearly impossible to source meaning you cannot identify the owner. However if you can prove your original deposit into coin base or other exchange it is possible to print out the block chain transaction history and see the dates and the IDs numbers behind your Coin base account, your treasure wallet, or any cold storage wallet, and then put all these pieces together showing the money going back into your account before closing. This is how you could verify the money deposit and withdraw is yours along with the amount of time you had ownership.
Gifts Letters For Down Payment
Gift deposits can be tricky. What is deemed an acceptable gift and what is not will depend on the lender and the mortgage lenders requirements. Key points when it comes to gifts:
Money can be gifted from such family members however, money gifted from people who have an interest in your mortgage transaction, including the seller, builder, real estate agent or developer, are usually not allowed.
Along with a gift letter, you’ll need to show the actual transfer of funds, which could be withdrawal/deposit slips or wire transfer receipts.
If you are making a cash deposit from money received, such as wedding gifts, make sure you deposit that money no later than 60 days after the marriage.
How Do Mortgage lenders Verity The Deposit Payment?
The Mortgage lender must verify and document the earnest money deposit amount and source of funds if the amount of the deposit exceeds one percent of the sales price or is excessive based on the Borrower’s history of accumulating savings, by obtaining:
• a copy of the Borrower’s canceled check;
• certification from the deposit-holder acknowledging receipt of funds;
• a Verification of Deposit (VOD) or bank statement showing that the average balance was sufficient to cover the amount of the earnest money deposit at the time of the deposit; or
• direct electronic verification by a Third Party Vendor (TPV) , subject to the following requirements:
o the Borrower has authorized the Mortgagee to verify assets;
o the date of the completed verification conforms with mortgage lenders requirements in Maximum Age of Mortgage Documents.
o the information shows that the average balance was sufficient to cover the amount of the earnest money deposit at the time of the deposit.
