Module 7: Assets, Down Payment, and Closing Costs

Not all money counts equally in a mortgage. Liquid assets: Cash in checking and savings accounts. Two months of statements, all pages, all accounts. Retirement assets: 401(k), IRA, 403(b) — counted at 60–70% of market value (reflects early withdrawal cost if liquidated). Stocks and brokerage accounts: 70–100% of market value. Business accounts: if used for down payment, documentation that the withdrawal does not harm the business is needed. Gift funds: require a gift letter stating no repayment expected plus documentation of the transfer. Reserves are assets remaining after down payment and closing costs — many programs require reserves expressed in months of PITI (0–2 months standard conventional, 6–12 months jumbo, 6 months for investment properties). Cash under the mattress, recent undocumented large deposits, and undisclosed borrowed funds do not count.