Wednesday, March 10, 2010

Mortgage tip

If you are planning on getting a mortgage anytime soon, be aware that reporting requirements are a lot tighter. They'll want all the statements for money you're putting up, obviously. What's more complicated is they'll also want statements for any accounts that are the origin of any substantial transfers shown on those statements. This isn't just about mortgage approval. If you're putting down any kind of earnest money or deposits in advance, like if you're contracting to build, the mortgage company will want to see statements with those checks clearing. And if there are any substantial deposits on those statements, they'll want to see the statements documenting the origin of those funds, just like funds for closing. And if those statements show substantial deposits, you'll need to supply documentation of that as well. Turtles all the way down.

So what should you do? A few months before you start looking, consolidate all the funds that you might use in a single account. Make sure there's at least one statement cycle in between those consolidation transfers and when you have to show a statement or write a check. Then just sit on that money in that account. Don't put any more money in, don't take any out. Don't get tempted by high interest online savings accounts. Put everything in one account and keep it there until you close. It'll make it a lot easier when it comes time to document your funds.

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