cancel
Showing results for 
Search instead for 
Did you mean: 

In Underwriting

tag
Anonymous
Not applicable

In Underwriting

I am in underwriting on my FHA loan. It is only in my name, not my wifes. We have a joint checking account. She got a loan back in october before I applied for a mortgage. The underwriter is wanting to source the deposit. None of the funds from the loan are going towards any down payment or reserves for the home. She used the loan to pay off credit cards. Will this cause an issue?

14 REPLIES 14
wife2froggy
Contributor

Re: In Underwriting

I have the same situation. Good news, not a major "issue." I had to write an LOE as to where the funds came from. Bad news, my experience is that 100% of the loan amount is deducted from my available reserves. My husband borrowed $1800 from his sister and deposited it into our joint checking. His payroll is direct deposited in our account, but the underwriters are removing that $1800 from my total assets, meaning I have to save an extra $1800 over and above what they originally asked for. 

On the road!
FICO 8 6/15/17 EQ 591 // TU 570 // EX 606

FICO 8 03/15/2021 EQ 702 // TU 700 // EX 699
Message 2 of 15
Anonymous
Not applicable

Re: In Underwriting

I'm surprised that your mortgage officer didn't specifically tell you not to make any large cash deposits in the 2 months prior to underwriting. I'm in the pre-pre-approval stage, so my mortgage officer told me that if I had any cash or whatnot that I was going to want to put towards the loan that I needed to deposit it ASAP so that it could "season" and wouldn't throw up any red flags during underwriting.

 

Last week I went to a first time homebuyer course and a different officer from a different bank told the group exactly the same thing. It sounds like your mortgage office let you down a bit here.

 

Where did the loan come from? If it was a legit bank type loan and it went directly towards paying off the credit cards then the underwriter will have the answer he or she needs about the funds. 

 

Froggy - At the very least, $1,800 isnt astronomical. It sounds like it's doable for you, so hopefully it won't slow the process down.

Message 3 of 15
wife2froggy
Contributor

Re: In Underwriting

Eve - It sounds like the OP is in the same situation I am. Both of our spouses took loans PRIOR to us even applying for the loan. I didn't know when he did it that 4 days later we'd stumble into an open house, decide we loved it, apply, get the approval and cruise through to underwriting. My LO is amazing and wonderful and tells me everything along the way, and I've read hundreds of hours worth of research since beginning this process a few weeks ago. Lesson learned, I'd have had him open his own account with it Smiley Happy

 

 

On the road!
FICO 8 6/15/17 EQ 591 // TU 570 // EX 606

FICO 8 03/15/2021 EQ 702 // TU 700 // EX 699
Message 4 of 15
Anonymous
Not applicable

Re: In Underwriting

Not sure if it applies to just FHA, but I took out a 6k personal loan in July in my name only. My wife applied for a mortgage in October on her own so we could qualify for a state mortgage program. We gave them the bank statement that included the 6k deposit. The underwriter never even questioned it. On the previous statement, I overdrawn my checking account by $14( accidentally paid car payment twice) and we never got questioned about that. You never know how underwriters work.
Message 5 of 15
Anonymous
Not applicable

Re: In Underwriting

Update:

 

My LO just wanted me to source the deposit so I gave her the account statment and everything. She said since none of the funds are still in the account it should not be an issue.

Message 6 of 15
Anonymous
Not applicable

Re: In Underwriting


@Anonymous wrote:

I'm surprised that your mortgage officer didn't specifically tell you not to make any large cash deposits in the 2 months prior to underwriting. I'm in the pre-pre-approval stage, so my mortgage officer told me that if I had any cash or whatnot that I was going to want to put towards the loan that I needed to deposit it ASAP so that it could "season" and wouldn't throw up any red flags during underwriting.

 

Last week I went to a first time homebuyer course and a different officer from a different bank told the group exactly the same thing. It sounds like your mortgage office let you down a bit here.

 

Where did the loan come from? If it was a legit bank type loan and it went directly towards paying off the credit cards then the underwriter will have the answer he or she needs about the funds. 

 

Froggy - At the very least, $1,800 isnt astronomical. It sounds like it's doable for you, so hopefully it won't slow the process down.


 

Will gift money be an issue? 

I recieved 5k as a gift. I did use it to pay off debt. This was in October. (I am in the preapproval phase)

I could get a letter from the relative stating that the money was a gift and not a loan?

Message 7 of 15
wife2froggy
Contributor

Re: In Underwriting

Hi Samantha,

 

The UW will require you to provide not only a letter from the gifter stating it was a gift but the gifter will also need to provide 1-2 months' bank statements proving they had the funds to give.

An alternative, since you're still in the preapproval phase, is to wait another 2 months before getting really serious (are you going FHA? They generally only need 2 months bank statements)

In my situation, I have to have the costs to close PLUS the amount of the loan in my bank to cover "unsourced" funds.

On the road!
FICO 8 6/15/17 EQ 591 // TU 570 // EX 606

FICO 8 03/15/2021 EQ 702 // TU 700 // EX 699
Message 8 of 15
Anonymous
Not applicable

Re: In Underwriting


@Anonymous wrote:

I'm surprised that your mortgage officer didn't specifically tell you not to make any large cash deposits in the 2 months prior to underwriting. I'm in the pre-pre-approval stage, so my mortgage officer told me that if I had any cash or whatnot that I was going to want to put towards the loan that I needed to deposit it ASAP so that it could "season" and wouldn't throw up any red flags during underwriting.

 

Last week I went to a first time homebuyer course and a different officer from a different bank told the group exactly the same thing. It sounds like your mortgage office let you down a bit here.

 

Where did the loan come from? If it was a legit bank type loan and it went directly towards paying off the credit cards then the underwriter will have the answer he or she needs about the funds. 

 

Froggy - At the very least, $1,800 isnt astronomical. It sounds like it's doable for you, so hopefully it won't slow the process down.


What about money that is a gift?

Message 9 of 15
Anonymous
Not applicable

Re: In Underwriting

Sorry for the double question-

 

It will be a VA loan. They would ask for a total outside parties bank information?

Message 10 of 15
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.