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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?
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".
@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