Verification of Deposit
Definition and meaning of Verification of Deposit in real estate.
Verification of deposit is a formal document signed by a borrower's financial institution that verifies the current balance, average balance, and history of the borrower's accounts.
In more detail
During the mortgage underwriting process, lenders must verify that the source of the buyer's funds is legitimate and stable. While lenders often accept recent bank statements, they may request a formal verification of deposit to prevent fraud and ensure no recent, unexplained deposits have occurred.
The bank official completing the form will detail the account types, open dates, current balances, and average balances over the past two months. This document helps verify that the money has not been temporarily borrowed from another party just to qualify for the loan.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Initiated by | Mortgage lender |
| Filled out by | Bank officer |
| Typical timing | Processing and underwriting phase |
A mortgage lender requests a verification of deposit from a buyer's bank to confirm that the savings account holds enough seasoned funds for a down payment.
Frequently asked questions
Can I use recent bank statements instead of a verification of deposit?
Yes, lenders typically accept the last two months of bank statements first, but they will request a formal verification if they need to clarify account history or verify funds.
What are seasoned funds in a verification of deposit?
Seasoned funds are deposits that have been in the borrower's account for at least sixty days, showing they are not a temporary loan.