Open a separate, boring savings account.

When you pay your earnest money deposit, pay it with your savings.

When you show statements with proof of down payment, only show the boring account that you're actually using.

This account does one thing: receive money.

Bonus points if it's a high yield account.

It doesn't pay bills. It doesn't pay rent. You don't link it to Venmo.

The reason this matters more than you'd think is because of underwriting.

Underwriting wants to see two months history of this money.

When underwriters see your down payment money sitting in a checking account, they go through your transactions. They might see overdrafts. They'll see a payment to _ and ask for proof that it isn't a recurring charge.

This isn't telling you to lie about your monthly debts, I'm telling you that simple history = smoother loan process.

If your down payment is sitting in a savings account that only receives deposits, underwriting has way less to dig into. Fewer letters of explanation and less paperwork.

So if you have a few months before you're going to buy your home, open that savings account and park that down payment money in there.

Sam

I write educational posts on buying your home for the first time at r/NewbHomebuyer

Originally shared by u/SamTMortgageBroker in r/NewbHomebuyer — view the original thread.