When to have enough cash before closing?

[joshall]

We were told we need to have enough cash showing on the bank accounts two months before closing.

Is it true?

We will close in July, and have planned to just have enough cash saved by 7/15. As of today (May 4th), we do not have enough cash for downpayment, and for closing!  Hope you guys can advise.  Thanks.

[frugalQ]

We didn't have funds to close in the account until about a week before close. However, we we had specific deposits being made and was able to document the deposit dates and amounts.

[joshall]

We are solely dependent on our monthly salaries so we will be able to come up with an additional $8000 by July. I hope the lender can truly see that.  We have no gift or other funds.

[Lemmus]

...they will look at your checking and savings statement totals, not the details unless there are unusual deposits ...time your deposits to max just before your statement ...hold off paying bills until after the statement has cut

...you need to show enough for the dp and prepaids up front ...as long as you can show where the rest will come from before closing, you should be ok

...don't forget about seller concessions if your market or appraisal support them ...not at all unusual for them to cover your closing costs up to 6% of contract price ...hth

[joshall]

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@Lemmus wrote:

...they will look at your checking and savings statement totals, not the details unless there are unusual deposits ...time your deposits to max just before your statement ...hold off paying bills until after the statement has cut

...you need to show enough for the dp and prepaids up front ...as long as you can show where the rest will come from before closing, you should be ok

...don't forget about seller concessions if your market or appraisal support them ...not at all unusual for them to cover your closing costs up to 6% of contract price ...hth

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Yes, we know. . But how many days before closing? 1 day before closing? Or will it need to be well 2 months in advance? Thanks!

[Lemmus]

...you have to be able to show the LO that the money will be there at closing ...hes not going to schedule it if the money isn't there ...it doesn't have to be in your bank 2 mts ahead of time ...but you have to convince him that it will be there before closing ...discuss it with him ...if you can't satisfy his demands, find another LO that you can satisfy 

[frugalQ]

lemmus is right...that was our situation.  we didn't have the funds in our account 2 months before, but we were able to show our LO where the funds would come from and when.  they were ok with what we provided.

maybe you can provide a schedule showing current bank statement amount, then add your deposits and subtract estimated expenses up until closing.  it may even be beneficial to use a separate account for normal monthly household expenses....and transfer funds from main account to new account.  that way you can isolate and manage the ins/outs of the account where the closing costs will come from. makes it much easier to track.

i learned that processors/underwriters prefer to have all documents neatly presented to them and very easy to read...if it's not, they will surely come back with more questions.

[Anonymous]

The lender will usually request that if the loan is risky or if they feel the borrower may not have the capacity/ability to save enough to have the funds at the time the file is submitted to UW.