![]() In those instances, the lender must use reasonable judgment based on the available documentation as well as the borrower’s debt-to-income ratio and overall income and credit profile. Occasionally, a borrower may not have all of the documentation required to confirm the source of a deposit. If funds from a large deposit are needed to complete the purchase transaction (that is, are used for the down payment, closing costs, or financial reserves), the lender must document that those funds are from an acceptable source. Documentation or explanation for large deposits is not required however, the lender remains responsible for ensuring that any borrowed funds, including any related liability, are considered.
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