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Underwriting, bank statements and deposits

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Contributor

Re: Underwriting, bank statements and deposits

Thanks again for the continued, detailed answers to my questions, and for your anecdotal account of timing of events related to the process. Much appreciated, and will come in handy later on.

Regarding my possible liquidation of assets, and when that should occur, I'm going to talk to my financial advisor and get his opinion on what to do.

From a different perspective, if you have to borrow more than a 1k to avoid PMI, are you really able to afford that house?   You should be able to save the money without having to borrow.

This is definitely a valid perspective, all things being equal. My thinking was that if borrowing an amount that ultimately cost someone $4000 in finance charges saved that person from wasting $15000 in PMI, that seems like a no brainer, and a good financial decision.

Also, the decision to buy this summer is set in stone. I'm either going to reach 20%, or I'm not. I don't want to save for another year and risk interest rate and home price increases, that could cost wind up costing me an additional tens of thousands of dollars over a 30 year loan. Things look really good right now.

To be honest, if I am able to make 20% and show 2 months of reserves, there will literally be very little left besides my retirement, so that is a kind of tenuous situation. My income is safe, but still. I guess I will be able to better gauge things as next summer approaches, but it might turn out that 12% down and PMI might be the better option, even though 20% is technically possible.

What state are you going to be living in?  

Probably CT, which doesn't appear to be community property state.

PS - make sure the accounts are in your name only - not joint with anyone.   It will keep things simple for the UW.

The "main account" is in my name only, which my paychecks are deposited into, the rent and a few other expenses are drawn from, and the month to month savings are illustrated. There is another account that is joint with me and DW, her paychecks are deposited into, day to day expenses are paid from, and it basically breaks even from month to month. I was planning on only showing the UW the "main account".

The mortgage payment I plan to, and would like to pay is about $2100. This is currently the amount I pay in rent, and have been for years. Showing that in the main account, along with the month to month savings, over 2-3 months, should hopefully be enough to prove to them I can handle the mortgage.






Message 11 of 13
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Senior Contributor

Re: Underwriting, bank statements and deposits

Regarding my possible liquidation of assets, and when that should occur, I'm going to talk to my financial advisor and get his opinion on what to do.

 

Keep in mind, your financial advisor makes money off of your money.   For the safety of his paycheck, he'd *probably* advise you to leave the money invested.   (I don't know if he's more friend or more advisor.   My statement is a blanket statement.)

 

For you to put 20% down, it's better to get the money in the bank account now.  All kinds of things can happen when you try to liquidate funds.   Delays, fees, price drops, etc.

 

Feel free to PM me or post on here.  I check the board regularly.

Message 12 of 13
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Established Contributor

Re: Underwriting, bank statements and deposits


@IOBA wrote:

IMO, the funds in the account that the underwriter sees should have the down payment and 2 months reserves and closing costs, if you will need to pay them.   When it actually comes time to close, they won't know or care where the money comes from since you have to bring certified funds.


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