The home purchase process typically requires one or more security deposits from buyers to demonstrate that they are proceeding in good faith. These deposits should be handled in a specific manner in order not to interfere with the mortgage approval process. This article offers tips on security deposits for Florida real estate transactions.
Origin of Funds
It is important for home buyers to use personal funds for security deposits. Many loans actually require buyers to use personal money for all costs related to the purchase. Buyers are normally asked to furnish bank statements verifying that the funds were pre-existing in their bank account and that security deposits were withdrawn from that account. Bank accounts must also display sufficient amounts to cover closing costs and down payments. Lenders will verify all of this during the mortgage underwriting process. Buyers not using their own funds can impact their loan approval.
Some types of home loans allow monetary gifts to buyers from family members. However, home buyers should not have family members make security deposits on their behalf. The proper procedure involves a gift form, copies of account statements from the family member verifying where the funds originated, and then bank statements from the home buyer displaying receipt of the funds. Following this process will minimize delays when underwriters evaluate the loan application.
Getting Ready for Security Deposits For Florida Real Estate Transactions
Buyers preparing for a future real estate purchase can take a few steps to prevent delays with their loan approval. First, they should make sure all funds saved for security deposits, down payments, and closing fees are in personal accounts and are verifiable. Have at least two months of bank statements available. The statements should not show any unusual behavior (such as significant cash deposits). Lastly, when making security deposits for Florida real estate transactions, buyers should utilize funds from their own accounts. If accepting gift money, ask your loan consultant for the correct procedure prior to getting those funds. These precautions will minimize delays and result in quicker underwriting approval.