Question about Funds for down payment

[Anonymous]

I am going through the process of being approved for a mortgage thru FHA. I have been pre-approved and have made an offer on a house and it was accepted.  I have a question about the source of some of the funds in my checking account and the 60 day period for accounting for where my funds came from. If it matters my current median score is 659. I have made an offer on a home and baring any obstacles is supposed to close by June 19th at the latest.

I sold some unneeded items musical items last month and deposited $900 cash in my checking account on April 17th. I am a musician and sold off some unused equipment for cash at a musicians swap meet and have no way to prove the source of these funds. I deposited the money into my checking account not thinking and used the funds to pay down 2 credit cards that had extremely high balances and the funds would not actually be used for my 3.5% down payment. I will have the full amount of my down payment derived from my pension before my closing and those funds I can document.

Am I worrying for nothing? The closer to the end of this journey I get the more my mind keeps tossing up what ifs.

[mwv813]

I wish I could help you here, but am posting because I would like to know the answer as well.  My closing is scheduled for the 22nd and the LO hasn't said anything about the funds in my account - but they did get printouts of my last 2 bank statements for all personal and business accounts.  I assume there was enough there i didn't need to justify further, but who knows.  They might throw up a red flag on me at the last minute...  

[Anonymous]

That is my biggest fear...a last minute problem.

[mynameainttracy]

I don't know for sure, but we were only questioned about any deposits that were greater than 25% of our regular monthly income deposits.

[Anonymous]

My monthly income is $2700. The deposit was $900. I wish I had someone to gift me but my parents are gone and my brother is unemployed. If they ask I will tell them the truth but if they need documentation I am out of luck.

[Anonymous]

I would say just ask your lender. One of our approval conditions was, "explain any deposits over $1300" they didn't care about anything less than that. Your lender should know their exact policy.

[wendlan]

My lender said we had to have the funds in the bank for 2 months,so from the time we were preapproved. It is in my savings seperate from other money.

[Anonymous]

Ask your lender. They will be able to tell you for sure.

[Anonymous]

I mentioned it in an email to the loan officer and he never said anything about the $900. He also knew that I would NOT have the 3.5% FHA down payment until nearly the time of closing and he was okay with that BUT...he is NOT the underwriting person and they may have questions or issues with the $900.

[Anonymous]

Gotcha. I've always wondered if you were to explain a deposit as cash you've been holding. For example, let's say you apply for a mortgage and have cash on hand you've been saving. If that was explained to underwriting, that'd be similar to your situation.