New Money in the Bank

[jo112205]

Hello,

I'm new to the board =)

Anyhow, my fiance and i are applying for a USDA Guarantee Loan. My fiance and I are currently college students. Well, we received our left over financial money (money the school reimburses after tuition is paid for). My questions are:

Is it safe to deposit it into our bank account?

Will the LO or UW question where we got this money from?

Will it give us problems?

Should we wait to deposit it after getting pre-approved?

Any insight or help would be wonderful. Thank you!

[MEE2Too]

Hello,

The answer to your question is the loan officer will question any large deposits that have been placed into your account after the loan process has started, but if the money is place in there before the chances are really small they would ask you about it, but just be perpared either way. If you are receiving a refund back from school make sure you keep all documentation stating that this came from the school and copies of your bank statements once it has been deposited into your account. It isn't the loan officer that requires all of this documentation it is the underwritier who is going to tear your life apart to see if they will approve your loan. I transferred my own money from my checking account to my savings account so that I coudl keep my funds for downpayment in one location and they asked me to provide them documentation of that so just old on to everything just in case. Good Luck and I hope all works out for you I closed on my home July 28 and I couldn't be happier.

[Heavanly1]

A friend of mine had a similiar situation. She received her school reimbursement and received pre-approval for a Homepath (Fannie Mae) loan.

During the underwriting process, she was told that none of her federal financial aid money could be used for her down payment and closing cost since you cannont borrow from one Federal program to participate in another. She had to prove that she had the funds necessary to close without counting her financial aid reimbursement.

[jo112205]

Thank you for the replies!

So, to prove that I won't use it for the mortgage in any way, can I make a seperate checking account for it? To show that it's sitting there not being touched or getting mixed up with our other money?

[BrianB_The_Loan_Professor]

Should we wait to deposit it after getting pre-approved? - Not unless you do not want to show where it came from - you cannot use it for anything associated with the loan

Is it safe to deposit it into our bank account? - yes perfectly fine

Will the LO or UW question where we got this money from?  - Yes you will need to show where it came from

Will it give us problems? - just the part where you have to explain where it came from

Not a huge issue so long as you can show where it came from

B