I typically suggest there are two ways of sending money into escrow. You can have the donor write a check and deposit in the borrower’s account, but you would need a lot of documentation showing how the money is deposited. We’ll ask for a canceled check or check image and the transaction history.
Sometimes it takes three, four days for it to clear. So depends on where you are in the contract. You might not have that luxury. The cleanest way. I always tell people is just have the donor and wired directly into the escrow’s account.
try to rent them out and
Let’s get to some of the problems you’re seeing through transaction. Maybe we’ll break it down. Order occupied it, non owner occupied too. But the first one is when I was buying a lot of these rental properties, of course I was using my own money. My parents never give me anything. Nobody gives me.
But some people when to buying their primary residence, shoot, what kind of 20 something year old kid can afford to $300,000 down payment. A lot of these guys are getting it from their parents. What’s the best back to sit there, like work that in a lot of people, when they come to me, obviously there’s some gifts.
But for gift letters, for the most part, conventional loans are pretty easy. They make it really easy for us lenders and also the borrowers. I typically suggest there are two ways of sending money into escrow. You can have the donor write a check and deposit in the borrowers. But you would need a lot of documentation showing how the money is deposited.
We’ll ask for a canceled check or check image and the transaction history. Sometimes it takes three, four days for it to clear. So depends on where you are in the contract. You might not have that luxury. The cleanest way. I always tell people is to have the donor and wired directly into the escrow’s account.
So this way there is a receipt and there’s no way the money is going wrong anywhere. But for FHA loans do know that we will ask for the sourcing of the donors funds. So meaning I will ask for two months of bank statements from the donor, I’m trying to sharp shape this. If I get a random check for my friend, Two and a half months prior to when I throw this money into escrow.
Nobody checks or there’s nothing I need to write that this is when the real estate industry, I hear a lot of real estate agents would say, oh, you need to have two months of bank statements, clean bank statements, or seasoned funds really that’s a myth, but it really depends on what the deposit is for. We call them large deposits.
So large deposits definition is basically any positive. That’s more than 50% of the total gross income used on the loan application. So let’s say if you and your wife combined $10,000 gross ran knowing gross income on the loan application. So anything higher than $5,000 deposit into your account, we just have to know what it is then.
Why is it deposited? We just want to make sure. You’re not loaning a $5,000 to go buy this house and now you have to pay back and we need an attitude that we can come or get, or it can’t, it gets, it’s a gift. And we just need a documented source and explain, I just got it from my block five or crypto deposited from Coinbase.
We can use a crypto as down payment. I’ve got this other, wasn’t he wasn’t annoyed, but the bank was being really at the way. They’re like, oh, we see her in these private placements. And we amount to make sure, like LPs don’t both sign on debt. They’re the best investors, but they’re asking all these questions.
Any thoughts on that? Other than finding a VA letter, you can explain all you want. If you met with an underwriter that won’t let go. Sometimes it’s just easier for you to change lenders to someone who can get that scenario ran by their underwriter. And if you get the, okay, then resubmit that application over there, that’s what we do as brokers.
Sometimes we run into cases like that. Yeah. Lender aid doesn’t work out. So we quickly, we have your application. We it’s so easy for us to go to the second lender, go to the next lender that can get this done ASAP.
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