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Should I Move My Down Payment and Closing Costs to a Separate Bank Account?

With my account showing zero activity, will I avoid inquiries about cash deposits in my personal account by doing this? Or will I still need to share my personal bank statements? by TonyMontana411 from Carson, California. Feb 2nd 2017 Reply


Todd Windes (twindes)
#225 ranked lender in California - 6 contributions

Hi Tony, ''great question. In my experience (20 years), Please do not deposit or move any funds without consulting your loan officer first. Tracking the money in the accounts its literally the most frustrating thing to do in the transaction. Its best leave it where it is if possible. Always use a cashiers check for the deposit, or a wire directly to escrow. You can also wire your downpayment and closing costs funds to escrow as well.

Feb 2nd 2017
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Todd Windes (twindes)
#225 ranked lender in California - 6 contributions

Hi Tony, To expand on my answer to your question, the money used on a house transaction must be seasoned for 60 days, or it must be sourced (proof of where it came from) if its within those 60 days. If you transfer it now and buy a house and close 70 days from now you should be fine. If you go into escrow and then transfer the money the banks ask for documented proof of where it came from.

Feb 2nd 2017
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,782 contributions

If you're already under contract, then absolutely NOT.. do not move any funds around.. Lending guidelines require the most recent 2 months bank statements.. if there is a transfer into your account from an "Undisclosed" account, then the underwriter will require 2 monthly statements on the "Undisclosed" account.. all you would be doing is creating a paperwork nightmare.. If you move funds into a brand new account with a different bank, then obviously you could not provide 2 months bank statements, so the underwriter would require you to source those funds.. All cash deposits over $500 must be documented.. if you cannot document the source, then the funds are disallowed and cannot be used in your transaction.. in fact, some companies might disallow the entire account if there is a highly unusual amount of cash activity.. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Feb 3rd 2017
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Mike and Jill Kohler (LenderMike)
#32 ranked lender in Pennsylvania - 56 contributions

Always check with your loan officer. Each lender is very strict on how they see these kinds of issues. Just make sure you keep a paper trail of every move you make so that it's easier for people to identify the moves you made.

Feb 9th 2017
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