+1 vote
I'm looking to buy a pre 1976 mobile home in Halifax MA 55+ community. My credit score is 646.  The lender I'm looking to work with needs 650. When I get to 650 and go for a pre approval, since it's an older mobile home I'm required to put down 20 percent. My question is.....I need to take out a small loan to cover the down payment. Should i wait a couple months to get pre approved so the loan doesn't show up on my bank statement?
asked Nov 14, 2017 in Home Equity Loans by Chrissy

2 Answers

0 votes
It is very, very hard to get a real estate mortgage approval for a pre-1976 manufactured home. That's because those homes were prone to electrical fires due to older codes. I know a lot about this because I actually got a number of these financed. If you can find a lender willing to approve a loan on this home, you are very lucky. Please make sure you have a licensed electrician inspect the property as part of your contract for your own safety.

If you borrow right before buying, your source of down payment is "borrowed funds," and you have to truthfully indicate this. But borrowing for a down payment is a funny thing. If you take out some sort of personal loan a few months before buying, and put that money in your bank account, it becomes, for all practical purposes, your money. Your savings.

Here's a related article that shows how this works: https://themortgagereports.com/30272/how-do-lenders-know-if-you-borrow-your-down-payment

However, failing to disclose the loan and its monthly payment when you apply for a home loan would be fraud. You can state that the source of your down payment is "savings," but you MUST include this loan balance and payment in the liabilities section on your loan application. As you noted in your question, the influx of money and the monthly outgo will show up on your bank statements. And the fact that you suddenly have a lot more money will also appear in the "average balance" section of the bank verification or your statements.

As for the number of bank statements / months you'll have to supply, that depends on the loan. Most programs want two or three statements. But if you get alimony, for instance, or pay rent, they may want to see a year of statements to prove that you have been receiving the income or paying the rent on time. It really depends.
answered Nov 14, 2017 by Gina Pogol
edited Oct 16, 2018 by GinaPogol
0 votes
60 days bank statements are required by all lenders. Any irregular and large deposits needs to be sourced.
answered Feb 7, 2018 by GustanCho (106,540 points)

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