We will be looking to secure a traditional mortgage on investment property in a few minutes. Just wondering if it makes a difference on where we are keeping our available funds. We have a business checking account in the name of our LLC, and we have several personal accounts in various places. Just wondering if it's worth consolidating all available funds into one account, or if it matters where the money is.
Thanks in advance
IF you combine the money into one account the lender will see the large deposit in the one account and then force you to show that the funds were yours and you'll be required to show the statements from the accounts that the funds were liquidated from anyways so I'd say leave them in the accounts. Business assets can be tricky, below is what fannie mae says about the use of business assets for down payment, reserves, etc., "Business assets may be an acceptable source of funds for the down payment, closing costs, and financial reserves when a borrower is self-employed and the individual federal income tax returns have been evaluated by the lender, including, if applicable, the business federal income tax returns for that particular business (non-Schedule C). The borrower must be listed as an owner of the account and the account must be verified in accordance with B3-4.2-01, Verification of Deposits and Assets. The lender must perform a business cash flow analysis to confirm that the withdrawal of funds for this transaction will not have a negative impact on the business. See Section B3–3.2, Self-Employment Income, for additional information on the analysis of a self-employed borrower."
Best if you can move money 2-3 statement cycles before using toward purchase to avoid having to show statements for all the accounts, but this is typically only a minor annoyance if you must send additional statements or explain large deposits, as long as everything is on the up and up.
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