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Proof of funds for closing cost

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Anonymous
Not applicable

Proof of funds for closing cost

I was planning to apply for 100% finance mortage for first time home buyer with my local credit union. According to their website, my closing costs for 200K home would be 10,500. Currently I have 5K in savings and 10K my 401K. Their loan option allow the buyer to receive up to 3% in closing concessions, which I plan to negociate with seller to get. So I sent an email to my credit union asking if I could apply for a pre-approval, if I don't have all the funds they say I will need for closing  (10,500), and their answer was "We would not be able to provide a preapproval letter without sufficient cash to close and possible reserves".

So I'm wondering If I find a house, make a offer asking for 3% closing help and the offer is accepted with no pre aproval letter, the bank can still ask me to provide prove of funds of 10,500 n my account?

Message 1 of 4
3 REPLIES 3
Anonymous
Not applicable

Re: Proof of funds for closing cost

I would find another lender, Try a mortgage company. They sometimes have easier overlays.
Message 2 of 4
ShanetheMortgageMan
Super Contributor

Re: Proof of funds for closing cost

You can just write up a letter explaining how you'll be saving up the funds prior to closing and your loan officer would include it with the loan submission to underwriting.  Just had a client do this and the underwriter didn't have a problem with it, they just added a prior-to-closing condition of "Verification of sufficient funds to close and paper trail for any large deposits".

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
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Message 3 of 4
kc0039
Established Contributor

Re: Proof of funds for closing cost


@ShanetheMortgageMan wrote:

You can just write up a letter explaining how you'll be saving up the funds prior to closing and your loan officer would include it with the loan submission to underwriting.  Just had a client do this and the underwriter didn't have a problem with it, they just added a prior-to-closing condition of "Verification of sufficient funds to close and paper trail for any large deposits".


Find a lender that will do this for you. It's as easy as that

Licensed in IL
Message 4 of 4
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