Mortgage Approval: Non-Payroll Deposits Into Your Bank Account
Bank Deposits Of All Sizes Can Cause Headaches
Recently, underwriters have been requiring that all significant deposits other than payroll be documented with some sort of paper trail. These “significant” deposits can range from:
$10 Mail-in-Rebate checks
$50 Birthday checks from Grandma
$600 in quarters from a laundromat
The underwriters are not deeming any deposits as “insignificant”. They need to be sure you’re not borrowing against anything else or cash advancing credit cards to qualify for home financing.
You need to show you can meet all your monthly expenses based solely on payroll income. Strong merits as a borrower (income, great credit score, etc.) do not make you exempt from this process!
The process to document these deposits is simple:
Talk to your banking institution to request a copy of the checks in question.
They will usually provide these on the spot & keep these records for at least 90 days.
You will provide the underwriter with a detailed letter of explanation that clearly shows the details of the deposit.
These two items will satisfy the underwriter almost every time!
Remember that you will most likely be providing us with updated banking statements throughout the entire process, so it would be helpful to make copies of any checks you receive before depositing them.