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Acceptable sources of funds to close

Earnest money deposit

Earnest money is a deposit made to a seller showing the buyer’s good faith in a transaction. Your earnest money goes towards your down payment. With earnest money, we need a copy of the check and proof that it cleared your account. Earnest money must be taken from an account that we have verified via bank statements. We’ll need 60 days or all pages of bank statements for two full months.

Stock liquidation, 401(k) loans, proceeds from a secured line of credit

We’ll ask you for a statement showing the amount available before the transfer, proof of sale of stock, amount of loan, and then a copy of the front of the check and/or transfer into your checking/savings accounts. We need to see payment terms on a line of credit to calculate the payment on that loan.

Gift from relatives

We’ll ask you to have them sign our Gift Letter form. We’ll also ask for a copy of the cashier’s check or a copy of the wire from their account (with their name referenced) and in the exact amount matching the Gift Letter form. We need proof of the deposit into the account or the wire to escrow at closing. Not all relatives qualify for gift giving in real estate transactions. Ask us for details.

Checking/savings/money market/ investment accounts

We’ll ask you for a bank statement with all pages covering a 30–60 day time period. If there’s a joint person on the account, we’ll need a letter that our borrower has access to all of the money in the account. If there are deposits on the statement that are anything but payroll deposits, we may need to “source” these deposits, which means we’ll need to know where the money came from. We’ll likely need copies of any nonpayroll check(s).

Proceeds from the sale of other real estate

We’ll ask you for a copy of the HUD Closing Statement from that sale and the deposit of those funds into your account.

Secured Borrowed Funds & Grants

Down payment and closing cost assistance programs that act as a second lien on your home which is deferred, forgivable or repayable.

Unaceptable Sources or Funds to close

• Cash on hand • Cash proceeds from an unsecured loan • Non-vested stock options • Custodial funds • Trade equity funds • Loans from friends or relatives

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