Helping Your Buyers Avoid Down Payment Pitfalls

Today I’m going over some great ways to avoid down payment pitfalls.

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As you’re beginning to work with buyers who you know will require a loan to purchase a home, typically 90 days before closing, talk to them about their fund’s availability. If they’re going to be pulling together funds to come up with a down payment, which might include a gift from their parents, they need to do that outside the 60-day window because lenders will typically look at two months worth of bank deposits. 

So, if the down payment is going to be a gift from a family member, or, say an engaged couple is going to be putting their funds together for a down payment, make sure all of that is done outside of the 60-day window. 

Also, if they are for some reason stashing cash in their home instead of putting it in the bank, they need to start depositing that money in small deposits on a regular basis.

There will be final credit check so don’t make any unwise purchases.

Although the engaged couple might be splitting the down payment, they both need to qualify, so funds should be in both accounts. They also shouldn’t wait until the last minute to consolidate their funds. Liquidating assets takes time, and they want to make sure they have the funds for their part of the down payment. 

Finally, counsel your buyers not to buy something like a car or furniture until after the closing. There will be a final credit check, so they need to wait until after the home is bought to make those kinds of purchases.

If you have any questions about avoiding down payment pitfalls, don't hesitate to reach out to me. I would be happy to assist you.