When buying real estate, part of the purchase process normally includes one or more escrow deposits from buyers to assure sellers that they are proceeding in good faith. These deposits must be submitted in a specific manner so as not to interfere with the mortgage approval process. This blog provides tips on escrow deposits for MA property purchases.
Location of Funds
It is essential for home buyers to utilize personal funds for escrow deposits. Many financing programs actually require buyers to utilize personal funds for all costs connected to the purchase. Buyers are normally asked to submit bank statements demonstrating that the funds were pre-existing in their account and that escrow deposits were withdrawn against that account. Accounts must also include enough funds for closing costs and down payments. Mortgage companies will confirm all of this information prior to approving a mortgage. Buyers failing to use personal money can impact their loan approval.
Receiving Money as Gifts
Some types of loans allow gifted funds to buyers from family members. Even so, buyers should not ask gift givers to submit escrow deposits on their behalf. The preferable procedure includes a gift letter, copies of account statements from the gift giver verifying where the funds came from, and then account statements from the buyer showing acceptance of the funds. Staying with this process will minimize issues when underwriters process the paperwork.
Preparing for Escrow Deposits For MA Property Purchases
Buyers planning on an upcoming home purchase should take a few precautions to reduce delays with their financing approval. First, they can ensure all money saved for escrow deposits, down payments, and closing expenses remain in personal accounts and are documented. Have several months of bank statements available. The statements should not include any unusual transactions (such as cash deposits). Finally, when submitting escrow deposits for MA property purchases, buyers should utilize money from documented accounts. If accepting money as a gift, ask your mortgage consultant for the required procedure prior to receiving the gift. These precautions may prevent delays and lead to easier mortgage approval.