I was required to disclose the source of my down payment funds when purchasing my house. They asked where the funds came from since my bank statement just showed a deposit in that amount in one block. It took a while to convince them that it was not a gift or another loan to pay off.
Honest question, where does this happen? If you are buying a house, the solicitor or whoever is dealing with legal/deed etc will ask where the money came from, don't they? In the UK atleast that seems to be the case. Lenders are fine as long as you can show your future income (eg by being employed), but not much about how you got your initial deposit money.
I don't understand how is that possible to not know about a home loan. Didn't you have to open the loan when you bought the home? Don't you know what banked you dealt with?
Why would you be involved in their loans at all, if you're the seller of the house? How would you know what they were putting as down payments or what their incomes were?
as someone going through the mortgage process currently, I can specify that some of my down payment is a loan. Not sure what you are talking about. If you hide the fact that it is a loan, maybe it is fraudulent? But it very clearly is allowed as I can specify it in the paperwork.
Typically a mortgage will require the buyer to intend to use the property as their primary residence. If you want a loan to buy a house you intend to rent, you get a rider on the mortgage to that effect. So it is in the public records, if you used a purchase loan.
In the US, it's a requirement of mortgage lenders. This makes it less of a legal requirement and more of a de facto requirement, as most homes are purchased via mortgage in the US.
In the UK if you're a Normal Person buying a house with a mortgage and a 20% deposit, they want to be reasonably sure you didn't get a personal loan (or something similar) for that deposit. Because there's more risk (i.e. them charging you more interest) if you're in debt to 95% of the house's value.
Of course, if you're a Billionaire Russian Oligarch, you might don't need a mortgage so this might not apply.
I suspected this would be brought up, which is why I tried to pre-empt it by specifying that a home mortgage has special conditions that make it not 1 to 1 comparable to other leveraged investments, such as non callability, non recourse (in California), you get to live in it, and you get to live in that specific location (assuming you value it).
This. Many banks as a condition of giving out a loan require a house as collateral. A house that's underwater also tacks a debt to your personal name for instance.
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