Loan Application - Moving Money Around

When you apply for a mortgage loan, the lender checks to make sure you have the necessary funds for the down payment and other closing costs. They do this by examining bank statements and other financial information you have given them. Usually this process is simple, but if you have been moving money between accounts and other financial entities then it can become more difficult. The lender will have to track the movement of funds to ensure that you have the necessary funds and that you are not trying to deceive them.

While moving money around will probably not cause your loan application to be rejected, it may well complicate matters. The loan officer concerned with the source of your funds, will want you to prove that you legitimately have the required money for your closing costs and that you are not trying to commit loan fraud. This will mean answering more questions regarding the origination and movement of your funds, which of cause slows down the loan application process and means more work and stress for you.

So in order to ensure that your loan is expedited as fast as possible, please ensure that in the few months prior to you applying for a mortgage loan, you do not unnecessarily move large amounts of money between your financial institutions.