At the beginning stages of purchasing a home, you may hear your mortgage lender say the term “down payment.” A down payment is a sum of money that a buyer pays in the early stages of purchasing a home.
Having the funds for a down payment, which can come from various sources, give mortgage lenders the confidence in providing you with a mortgage loan.
Source of the Down Payment Funds
One of the first questions for borrowers is, “What is the source of the funds you will be using for the down payment?”Mortgage lenders like to verify assets, which has become one of the most scrutinized areas of underwriting in the last few years.
In order to use funds in the loan process, the source of any funds appearing on bank statements in the last 60 days must be verified. The lender will request documentation to show where the funds came from and how they got into your account, whether it be by check, wire transfer, or other ways.
Disallowed Down Payment Funds
Many borrowers accumulate funds and do not deposit them into a bank account or receive gifts of cash from others that have not been deposited. These are instances in which those funds will not be allowed to be used for the home purchase. If you have funds held in cash and anticipate buying a home, it is important to deposit them into a banking institution at least 60 days before beginning the mortgage application process.
Gifts from Family for the Down Payment
Gifts from family members are acceptable sources of funds as long as they can be verified. This is often a sensitive subject as family members will be required to show bank statements or documentation to show where the funds came from.
Limiting Movement of Funds Lessens Documentation
We also tell our borrowers to limit the movement of funds from one account to another as this just adds to the documentation that must be provided to show the movement of funds among accounts.
Marimark Mortgage
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in mortgages for first-time homebuyers, conventional home mortgages, refinance loans, reverse mortgages, and FHA, VA, and USDA mortgage options. In addition, we’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application or contact us.

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