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Sourcing Funds for Purchase and Refinance

Posted on September 25, 2015 by Ray Williams (NMLS #216267).

Sourcing funds from bank accounts is by far the most difficult part for many of my clients. This seems to be the most common concerning area in which can cause my clients to get very irritated and frustrated.  Believe me, we understand and please know that we aren’t looking at bank statements to see how many times you went to Starbucks.  There are many reasons and also guidelines that we have to abide by.

The Patriot Act and anti-money laundering laws that were passed by our government are the main reasons behind needing to source large deposits.  Any deposit that is at least 5% or greater than your gross monthly income will need to be sourced.  Cash is not an acceptable source of funds UNLESS you are purchasing the property in cash!

When you are transferring funds from different accounts, keep in mind that you will need to provide bank statements on all the accounts involved.  This is “sourcing” funds and showing where the money is moving from and making sure they are an acceptable source.  This is where many times it can become cumbersome and at times feel very invasive.  We understand the frustration, we know that it can seem intrusive but the main thing is to know that your lender is on your side and they are trying to help you get approved for a mortgage.  We are not here to be a problem, we are here to be your solution, your problem solver.

Keep in mind why these laws  were created for our protection. Remember we did have a Real Estate market crisis and too many dishonest, inadequate and faulty practices.  We don’t want to go down that road again and that is why many guidelines changes, licensing requirements increased and more outlets for help and education came into place.

If you every have any questions about funds and sourcing your funds give us a call or ask your lender, address any questions or possible problems early on in the process.  Don’t wait for your lender or even the underwriter to find a problem.  It works out better if all is disclosed upfront.

 

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