Why would my verified assets that are used to determine my down payment be lower than expected?

We must verify that you have control over the assets you are planning to use for your down payment. There are some cases when verified assets might be lower than you expect. Here are a few examples:

1. If you have large deposits in your bank account from an ineligible source (e.g. cash deposit, undocumented source, unsecured loan such as a credit card advance) we will not be able to give you credit for those funds.
2. We are typically only able to use assets from investment and retirement accounts if they are liquidated prior to closing the loan.
3. We are only able to use a percentage of any pending property sale values, and not the full amount.
4. We only consider assets from business accounts on a case-by-case basis.

If you want additional certainty as to the purchase price you qualify for, we recommend getting a verified pre-approval letter.

Why is mortgage asset verification important for your loan?

Mortgage asset verification is crucial for both borrowers and lenders as it provides a clear picture of your financial health and ability to meet the obligations of a home loan. Lenders need to confirm that you have sufficient liquid assets available to cover your down payment, closing costs, and ongoing mortgage payments, even in the event of financial hardships. Verifying assets also helps mitigate risk by ensuring that only valid, traceable funds are being used in the transaction. This process gives lenders confidence that you can maintain your mortgage, protecting both parties from potential default and financial loss. Ultimately, accurate asset verification improves the chances of loan approval and may even result in better loan terms.

How to ensure your verified assets meet mortgage requirements

To ensure your verified assets meet mortgage requirements:

1. Start by organizing documentation that clearly shows the source and availability of your funds.
2. Keep thorough records of all transactions, especially large deposits, and ensure they come from eligible, traceable sources like your salary or investment returns.
3. Avoid using unverified cash deposits, which may be excluded from your asset calculations.
4. If you rely on retirement or investment accounts, you may want to consider liquidating the necessary assets before closing the loan to make them accessible.

Additionally, it's important to maintain a healthy reserve of liquid assets—typically around six months' worth of mortgage payments—to show lenders you can manage your loan in case of unexpected financial setbacks. Lastly, an automated asset verification system can speed up the process, reduce errors, and ensure transparency for you and your lender.

Ready to get pre-approved? Get started today!