Ask the Residential Mortgage Underwriter: Can a borrower use money from a business account for his/her down payment?

Q: Can a borrower use money from a business account for his/her down payment?

A: Yes, the borrower can pull money from a business account but doing so will necessitate more underwriter scrutiny and several additional steps of documentation. First of all, the money from the business account would need to be deposited into the borrower’s personal account and properly documented and “sourced”, which means further documentation showing business receipts or invoices showing where the business money came from. This could get complicated quick, especially if there is large deposit activity in the business account. A smart Loan Officer / Processor team will send the bank a Verification of Deposit form to complete rather than even collecting a bank statement. Lastly, the business will also need to show it can sustain the withdrawal of funds. A letter from the business’ CPA stating that the withdrawal of funds will not impede the business operation is the easiest and most effective way to do this.

October 30, 2012 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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