I was chatting with one of the mortgage providers I know and we got to talking about earnest money deposits when you are buying a home.
Here is just a couple tips to keep in mind when putting down that Earnest Money Deposits that will help the mortgage get processed efficiently:
Personal Checks: make a copy of the front of the personal check and give to your mortgage provder; this is helpful to identify the source of where the deposits are coming from, but the front of the check alone will not satisfy underwriting. The mortgage provider will always need the cancelled check ( front and back ) and that can only be obtained from you the buyer who will have to get it from their bank. If you are not able to get a copy of the personal check that’s ok
Certified Checks\Funds: Please ALWAYS make a legible copy of these when they are used as the deposit. The mortgage provider will 100% of the time need to verify these for underwriting
Cash: This will never be an acceptable or verifiable source of deposit; so do not give cash to the escrow/listing agent
Check from your Employer- this is not an acceptable source of earnest money deposit
Check from Business Account for Self Employed Borrowers: this is ok usually but will require more paperwork for you the buyer, especially if you are not the sole owner of the business… so stay away from this if possible for your Earnest Money Deposit checks
Gift Check from Family member: if you are getting a gift from a family member for the down payment please make a copy of this check as well; the mortgage provider will still need to get the cancelled check from the gift donor. This is an acceptable source of a deposit as long as the buyer meets the Gift Money guidelines**** Gifts are ok up to 96.5% LTV FHA / up to 80% Conventional / and up to 90% Conventional as long as the buyer is putting 5% of their own money into the transaction. Gift funds need to be verified 14 days prior to closing.
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