Don't Move Money Around
When a lender is reviewing a buyer's loan package for approval, a main concern is where the closing costs and down payment are coming from. The lender will need the buyer to provide statements for the last two or three months of any of the buyer's liquid assets, savings accounts, checking accounts, certificates of deposit, money market funds, mutual finds, stock statements, mutual funds, and even retirement accounts and company 401Ks.If the buyer has recently been moving money around between accounts, there may be large withdrawals and deposits in some of them. The mortgage underwriter (the person that actually approves the loan) will probably require a paper trail of all the deposits and withdrawals. Most loans require complete documentation on the source of the funds to close escrow. This eliminates potential fraud and ensures quality control. The buyer may think that they are making it easier to purchase the home by consolidating accounts. However, they could actually be making it more difficult for the lender to document the source of the funds.
So before a buyer starts moving money around, they should talk to their loan officer.
Oh, and they shouldn't change banks, either.