Page 47 - the latest homebuying guide
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Reserve Funds
Sometimes lenders ask to see at least 2 months’ worth of Mortgage
payments covering principal, interest, taxes, insurance, and
condominium fees (if applicable). This amount represents your
reserve.
Verification of Deposits
To verify your assets, lenders will need to see two most recent
months of your bank statements and a completed Verification Of
Deposit (VOD) form. This form will confirm:
● The information on the loan application
● The availability of money to pay costs associated with the
purchase
● How long since your bank account was opened
● If the bank balance is much higher than the average balance
Funds in the account should be there for at least two months
Insurance
Three types of insurance policies are important when you purchase
your home.
Flood
Flood insurance is required when a property is located in zone A or
V in a federally-designated special flood hazard area (SFHA).
Hazard
Hazard insurance covers your home for loss or damage from fire,
tornado, hurricane, snow, hail or other disasters. You will be
required to pay 12 months’ worth of insurance. This amount is
not included in your closing costs and paid to the insurance
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