Lenders assume that the money for your down-payment is coming from your savings, or from the sale of an asset, usually another house. If this money is coming as a gift or a loan from someone else, that needs to be disclosed to the lender. Why do they care? Well, if you don't have YOUR money in the deal, you might be less inclined to take care of the home, pay the bills, etc. So that is why lenders often require a paper-trail to show where the money is coming from in the form of several month's worth of bank statements. They like the money to be "seasoned," which means you've been saving up for a long time.
The other thing lenders like to see is that you have money in the bank as liquid reserves to cover you in the event of an emergency or a sudden job loss. And again they like to see that you've had this money for a while. The old trick of having a relative put some funds into your account temporarily so you can qualify for the loan doesn't work as well as it used to because some lenders ask for 6 or even 12 month's worth of statements.
Well, there is a new way around this "problem." There are some companies out there that will "rent" you the funds needed to show that you have either the money for the down payment or for the liquid reserves. They will add your name to their account, although you won't have the right to actually withdraw any funds. They can send you backdated statements showing ample, seasoned funds to satisfy the lender. The only problem is that if the whole story isn't revealed to the lender, it's fraud. Please don't get caught by statements like, "Oh, we do this all the time. The lender just wants to see the statement."
If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty