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Verifying Assets To Qualify For A Mortgage

Verifying Assets For Dallas Mortgage ApprovalVerifying of Assets For a Mortgage in Dallas

When applying for a mortgage in Dallas being able to verify your assets, including your funds for closing, is a key part of the process!  In fact, it’s surprising how many people don’t know this is required so if you are one of them don’t feel bad because you are in good company.  Just know that applying for a mortgage loan means all parts of your financial history, credit history, employment and residency history goes under the microscope.

Assets are one of the many key components that Dallas lenders take into consideration when reviewing a borrower’s financial circumstances.

There are different types of assets that you can list that can help with qualifying for a mortgage in Dallas.

Types of Assets

Dallas lenders usually verify assets (liquid assets) just to make sure that the borrower has enough funds for closing. The final transaction usually requires down payment, closing costs, and prepaid items. There may be fees for total reserves that is required for the underwriting approval. There are many different types of assets allowed, below is a list of a few common ones:

Common Assets

  • Stocks
  • Earnest Money
  • Bonds
  • IRA/401(k)/Retirment accounts
  • Checking and Savings Accounts
  • Investments
  • Selling of non-liquid assets
  • Gift Funds

When loan program guidelines require Dallas lenders to verify assets, they usually require that they source and season. To source assets (sourcing assets) usually means that the lender must verify where the funds developed from. To season assets (seasoning assets) is to verify that the list of assets have in fact been in the account for about 2 months at least.

When a gift is in play the donor will need to be able to prove he/she has the funds to give.  A bank statement will be required and most likely your donor will need to wire the funds to the title company prior to closing.  Most importantly, if you are using gift funds this is something you want to mention upfront!  Gifts are great but don’t surprise anyone towards the end of the transaction with them because that will only delay your closing.

Reserve Requirements in Dallas

Reserves are also referred to as the amount of “liquid assets” that you would have left over after closing. When verifying Reserves, lenders usually look at reserves as equivalent to numbers of months that can cover the Principal, Interest, Taxes, and Insurance(monthly insurance if necessary), these are usually referred to as PITI.

Requirements for reserves do vary depending on the particular loan program (debt-to-income and credit score). To find out exactly how many months you have to have your reserves you should always check with a qualified Dallas lender.

Another important thing about using retirement accounts for reserves is that most loan programs limit you to only using 60% of the vested balance.  When you receive your loan application and if you notice the amount is different than your statement this is probably why.

Where to go from here?

The best thing to do is to give us a call.  We can evaluate your needs, determine the correct loan program for you and set you up with a Realtor once you are pre-approved.  During our initial call together we will take the guesswork out of the process and formulate a plan of action which hopefully will make this process as painless as possible!  Call us today! 

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