Greetings from the Vermont Mortgage Company! Today, we are going to dive into something that can be both good and bad – Sufficient funds for buying a house. Specifically, where said money has come from. As important as it is to have the appropriate funds you also need to be prepared to show where the money is coming from. Large sums of money coming out of nowhere can seem suspicious. If this occurs, it could slow down your mortgage process and potentially bring it to a halt.  

First, some background: About 10 years ago it was rather easy to get a loan. Having enough money and making large deposits was a quick fix. However, ever since the housing crash, many safeguards have been set up, to ensure such a thing doesn’t happen again. This means that several Anti-Money Laundering Laws have been put into place. We won’t go into large detail on what these laws are, but we can give you the info you need to make your loan process easier.

Not all deposits are created equal. Making sure your bank accounts are in order is a good first step to beginning a home buying journey. Remember, as we said in a previous blog: make sure your bank accounts and deposits are collected and filed properly. Having access to several months of bank statements and deposits are essential for a loan. But what we are looking at is the deposits unrelated to your job. Perhaps you sold your car online? Maybe your sister paid you back that $1000 she needed last year? Or you just decided to deposit all that money you kept under your mattress for a rainy day. Whatever the case, this is what can put you in a sticky situation when getting approved for your loan. 

The Anti-Money Laundering Laws are there to ensure, among other things, the validity of the money and where it came from. Therefore, if you suddenly come into a substantial amount of money, it can be seen as suspicious. Even a few hundred can set off red flags. To avoid this, make sure you have any documentation necessary to show where it came from. Bill of sales, checks, even something as simple as a letter from a friend or relative stating where the money came from and why, anything that can show the money has a source. Yes, it does seem like an inconvenience, but it is there for a reason. The next time you need to make large deposits, ensure it is properly documented. 

If you would like to learn more about the Anti-Money Laundering laws, feel free to check out FINRA website. There you can learn more and ensure you are prepared for anything. 

On our end, we will be working hard for you to ensure you get the mortgage you need. Be sure to call us at 802-863-2020, or check out our website to begin the process! We look forward to hearing from you. Until then, we hope you have a lovely week!

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