Finance Question
O I have an odd question maybe. I have four rental houses that I bought recently. I am now going to get a mortgage for a personal home loan for my personal home. The lender is asking for verification of my mortgage and leases which I expected, but all of a sudden they are demanding to see "proof of source of funds for the money used at closing for the four rental houses". I am irritated about this because it is more crap for me to have to dig out and also I can't understand why they would need to source money that isn't being used for a loan that they are originating and is already closed on. Can any of the loan people out here give me an idea of why on earth they would need this?
Thanks
Joe
[addsig]
joefm26 good to meet you.
I am thinking they want that to make sure you didn't borrow the funds or still owe the downpayments to someone else.
Joe,
Consider another lender as not all will be asking.
As noted already, they are likely concerned about giving you credit for the equity when there might be a loan hidden somewhere else.
John
[addsig]
Is it a "problem" to comply with the request? You said these properties were purchased recently. Did you use conventional lenders who also asked to verify source of funds for downpayments? If so, just provide your HUD-1s with a couple of months of bank statements that cover the acquisition period.
If you had bought only one rental property, the question may have never come up. Buying four in a short period of time does raise questions about the source of funds and your potential solvency.
[ Edited by NewKidinTown on Date 06/13/2004 ]
Well knwing what I know now as opposed to what I knew when I bought the properties, basically yes it is a problem. The sellers of the rental houses paid the down payment for me. I didn't knwo there was anything odd about this until after the deals had closed. So I am not sure what to do now. If I go to the bank I am tryng to get the mortgage through and say they paid it for me, are they going to go oh no you shouldn't have done that and turn me in or something?