We have a bit of a conundrum here, in the underwriting stage and have made different explanations for credit related issues, inquiries, etc. My closing costs and down payment has been sourced from my 401K withdrawal, my employment income has been verified, earnest money has been sourced from my income. We have had roughly 2k in cash deposits over the last month that were unsourced from random things that weren’t documented because we had no clue how any of mortgage rules in place. Is it normal for underwriters to come back and ask for explanations of these deposits that have no impact on the sourced employment income, which alone was enough to qualify and get a contract on the home we are looking at? Or could could it be because of credit history and scoring? DTI is around 24% , FHA 30 year with 3.5 down. Probably a question that needs a more broad explanation, but it’s a start I guess. Thanks ( MId scores are 590/578/613 )
Absolutely! They want to make sure the money is not from a loan, money laundering, untraceable gift, cash advance, any number of things. The LO has every right to want to know where those deposits came from.
Yes, it's normal. They want to make sure you're not taking on more debt to pay off debt or to buy the house. They will want to source every dollar that goes into the account. If you have a source, disclose it or write a short letter of explanation. As long as you didn't take out a loan or borrow money without a gift letter, you're probably fine