Assets: Proving You’re Financially Ready
In mortgage lending, assets refer to the money you’ll use for your down payment, closing costs, and potentially reserves—extra funds left over after closing to show financial cushion.
What we look at (and why)
Your bank account balances
- Why it matters: Your balances can answer a lot of questions, like are you a saver or a spender? Do you have a sizable emergency fund? Do you frequently use credit?
Investment accounts (retirement, stocks, etc.)
- Why it matters: Even if they’re unrelated to your home purchase, they’re great evidence of your financial stability.
Gift funds from a relative (with proper documentation)
- Why it matters: Gift funds are a great way that friends and family can support you during the homebuying process, just make sure you have all the right documentation to show where the funds came from (no mattress money, please).
That funds are sourced and seasoned
- Why it matters: This means the funds are traceable and have been in your account for 60+ days. Sudden large deposits can raise concerns and lower your chances of getting approved for a mortgage.
The more assets you can show, the stronger your loan application will be. Even if your income and credit are average, healthy assets can improve your approval odds.
Not sure how much you need? Different loans have different requirements—some even offer down payment assistance.
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