FNMA, FHLMC, FHA and VA as well as other investors in the mortgage industry require documentation of funds used for down payment, closing costs, prepaids and potentially reserves (funds remaining in your account after closing) if applicable. They require that we ‘source’ the funds. This means providing a 2-month history (actual statements with all pages) of where the funds have been to show they are truly the borrower’s own funds. Any large deposits will need to be explained and documented most likely.
If you plan to move funds from one account to another or open a new account and move funds during this time or cash out any investments or assets, please communicate this as soon as possible for the best outcome.
VERY IMPORTANT:
Be sure to communicate with your financial institution about the timing needed to cash out assets so that they are in a liquid [non-pending] state when the time is needed to draw the funds. Also, it is very important to research the timing required by your financial institution to wire the funds to escrow if wiring is required or desired. Movement and availability of funds can take time.