For those of you out there smack dab in the middle of the home buying process here is a little bit of news that may be beneficial in relieving some of the documentation headaches.
One of the biggest headaches I have seen with underwriting in the last few months or actually the last year is the tracing of funds, particularly the tracing of funds when it comes to gift funds.
To be safe, if you received gift funds from say your husband since he is not on the loan, you would need the most recent statement from his account, a signed gift letter and if it came in the form of a check that you deposited you would need a statement from your account showing that the money has been deposited.
As you can imagine this can be a huge pain in the neck. If you provide the incorrect month or miss a page on the statements you have to send them all over again, if the gift letter is not filled out correctly you have to redo that and the list of possible headaches goes on.
If you are working with a Fannie Mae loan program at this time here is a small although I’m sure welcomed respite.
If the borrower receives a gift from a relative or domestic partner who has lived with the borrower for the last 12 months, or from a fiance or fiancee, the gift is considered the borrower’s own funds and may be used to satisfy the minimum borrower contribution requirement as long as both individuals will use the home being purchased as their principal residence.
It seems to be common sense doesn’t it?
Well many things about underwriting at this stage don’t adhere to common sense.
Small as this change is it does relieve some of the frustration that these non-common sense based underwriting guidelines can bring about.
Staying on top of these types of changes will help your process go much smoother.