Q. Writing an earnest money deposit? Make sure to review our tips below to ensure your earnest money deposit is properly sourced for underwriting!
A. Asset verification is a very important piece of the mortgage process. Depending on your loan program and down payment, you may have to provide documentation to support the source of your earnest money funds. Funds may come from savings, payroll or a gift from an approved source in the form of personal check or online payment made payable to the seller’s agent brokerage or seller if “for sale by owner”. Cash is never an acceptable form for an earnest money deposit! While money orders are acceptable, they require more documentation to evidence the source of funds. Documentation to support the source of funds for all earnest money deposit types may include 1 – 2 months bank statements showing the funds were accrued from savings or payroll, a copy of the cancelled check and the bank statement activity to show the check clearing. If funds were from a gift, these items are needed from the gift donor and the borrower on the loan along with a signed gift letter. To ensure your earnest money deposit is done properly, contact your Mortgage Banker to discuss your earnest money options!
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