Clearing a Large Deposit Underwriting Condition
Lenders require sourcing for deposits that exceed 50% of the borrower's gross monthly income within the last 60 days. Each large deposit requires an LOE an
What Is This Condition?
- A large deposit condition requires the borrower to explain and document the source of any significant deposit in bank statements. This prevents undisclosed loan proceeds from being used as down payment.
A large deposit condition requires the borrower to explain and document the source of any significant deposit in bank statements. This prevents undisclosed loan proceeds from being used as down payment.
How to Clear This Condition
- 01Identify deposits triggering the condition
- 02Prepare LOE for each deposit
- 03Gather supporting documentation
- 04Confirm no undisclosed loans
Documents Required to Clear This Condition
- LOE for each large deposit explaining the source
- Pay stub (if payroll), sale proceeds (if asset sale), gift documentation, tax refund notice, or inheritance paperwork
- Business transfer documentation if funds from business account
How CTC Handles This Condition
Large deposit conditions are extremely common. CTC reviews bank statements on intake and identifies deposits that will require sourcing before the file goes to underwriting.
Frequently Asked Questions
What deposit amount triggers a large deposit condition?
Most lenders flag deposits exceeding 50% of gross monthly income. On $10,000/month income, any deposit over $5,000 in the last 60 days may need sourcing.
Do payroll deposits need to be sourced?
Payroll deposits can usually be verified by matching to the pay stub amount and employer name. CTC documents this cross-reference so underwriting doesn't have to ask.
What if I sold a car or personal property?
A bill of sale, title transfer, and the buyer's payment method (check or wire) typically suffice. CTC collects these documents and prepares the LOE.