The Application Preparation Blog Series: Assets Skip to Content

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The Application Preparation Blog Series: Assets

The third and final piece to “the mortgage puzzle” is your assets. Assets are sources of money other than your employment income that you can use towards the down payment and closing costs on your new home. When your lender is reviewing your bank statements, they will look for other liquid assets as well as your employment income.

There are several different types of assets that buyers can choose to use. The most common is the money you have in your checking or savings accounts. Keeping funds in these types of accounts allow you to make deposits whenever necessary and it’s easy to access your money when needed. Because all funds being used towards a mortgage loan need to be verifiable, you should be careful about making any large out of the ordinary deposits. Lenders want to make sure you are not taking on additional debt to use towards the purchase of your home, maybe by borrowing money from a friend, so if they see an unusual deposit into your account, they will need to verify where it came from.

However, if you do want to receive help for a down payment, you can choose to utilize gift funds from a relative as an asset. If you have a family member who is willing to gift you money to help purchase a home, this is a great way to get started. It must be a true gift with no intention of being paid back.  If you do choose to take advantage of this option, your donor may want to consult with a tax advisor regarding possible tax implications. Another tip to help you save time when applying is to establish the gift funds in your account as early as you can to move the loan process along quicker, but make sure you have the proper documentation to evidence the transfer of funds.

Buyers can also choose to take advantage of any retirement funds they have saved. If you do decide to withdraw funds from your retirement there will usually be a tax associated with it, so make sure you are aware of that as well. Using your retirement account could change your plans for the future, but if drawing from other assets is not an option, the pros might outweigh the cons for this scenario. 

Buying a home is often a life milestone people save towards; it is always a good idea to be on the lookout for places in your life where you can save money. Every little thing can add up over time, so your future self will thank you for any spending you can cut back on now.

We hope this Application Preparation series has been helpful to you in getting ready for applying for your home mortgage loan. If you would like more information about mortgage specifics, you can browse through our Knowledge Center to familiarize yourself further with various mortgage terminology and helpful explanations. If you are ready to apply, you can click on the “apply online” button on our website or call a Loan Officer directly.