Fort Lauderdale Mortgage Mistakes To Avoid

Lack of Down Payment Planning #1 Ft Lauderdale Mortgage Mistake

As a Fort Lauderdale mortgage broker, I repeatedly see loan underwriters conditioning borrowers for source of funds proof of down payment and closing costs.  There are some basics that are essential for home buyers looking for a Florida home loan to understand.  The first and most important rule is “Cash is an unacceptable source of money to be used as a down payment or closing costs”. Whether you are considering a Conventional Fort Lauderdale mortgage, or an FHA Ft Lauderdale mortgage, “CASH“ can not be used for the transaction.

All lenders are required to source all funds for a buyer’s down payment and closing costs in connection with a Florida home loan. You will be required to provide the most recent two months of bank or account statements for all funds being used in the transaction.  The underwriter will scrutinize every line item of your bank statements looking for payments of undisclosed debts and every deposit.  Any debt discovered that isn’t on your credit report will be added to your obligations and calculated into your debt ratio.  All deposits over $1,000 will be required to be sourced and proven.  In other words, you’ll need to document where the money came from for each deposit.

One of the most common mistakes I see as a Fort Lauderdale mortgage broker, is the deposit and proof of gift funds.  Remember the rule, “No Cash” applies to gift funds as well.  Ft Lauderdale mortgage underwriting guidelines now require the donor of the gift to provide proof of the ability to give the gift.  In other words, the lender will require a copy of the donor’s bank statement showing the ability to give the gift, as well as proof of the funds leaving their account.  That means if the donor deposits cash to give the gift, those funds can’t be used for the down payment or closing costs either.

When purchasing a home with a Florida home loan, it’s important to plan a few months ahead for your proof of down payment and closing costs.  Your best bet to have a smooth Fort Lauderdale mortgage transaction is to line up your necessary funds and have them already in place in your account 90 days prior to signing a purchase contract.  Otherwise, be prepared to provide acceptable source of funds documentation for all deposits and funds being used in conjunction with your Ft Lauderdale mortgage.