Deposits, Deposits, and more Deposits?
Buyers when you start the process of purchasing a home and you get pre-approved by your lender they should tell you what the bank is going to expect from you. Since I have worked with a couple of buyers now who have been put through the ringer by the UNDERWRITER who wants to know where you got all your money, I thought it would be appropriate to write this blog.
The bank account that your paycheck is deposited in is the account that you are going to have to print off and give to the lender to show that you make the money that you say you do. BUT... you not only have to prove that the deposit was from your employer, BUT any deposit you make into that account you will need proof!!! So here is what you should do leading up to purchasing a house so you don't get frustrated or have to run around like a chicken with your head cut off getting receipts, or copies of checks from the people who gave them to you etc.... So here is what you need to do for every deposit because you WILL HAVE TO PROVE WHERE THE MONEY CAME FROM....
1. Keep copies of all checks that you deposit BEFORE you deposit it. Notate who it is from and why they gave you the money.
2. If you have a Rental property and you have income from that rental property BUT you are NOT using that income to purchase your new house then DO NOT deposit that money into the bank account that you using to purchase your house.
3. If you work in the Hospitality industry and you get TIPS (like waiter, bellman, bartender, etc. ) DO NOT DEPOSIT these tips in your bank account...
If you follow these 3 rules then you shouldn't have any problems when you purchase your next home.