A deposit verification is a letter from a bank confirming an individual’s funds in a checking or savings account, required by mortgage lenders to assess credit risk. The process to obtain it is simple and can be done via a visit or phone call to the bank. Some banks also offer email deposit verifications for account activity tracking.
A deposit verification is a document prepared by an individual’s bank indicating that he or she has a certain amount of funds on reserve at the bank, such as in a checking or savings account. These letters can be prepared after a potential borrower applies for a loan elsewhere, such as a car or home loan. Mortgage lenders in particular will generally always require deposit verification before approving a mortgage.
The process to obtain this verification is usually very simple and usually only requires a visit or phone call to the bank to request the letter. The bank may send the letter directly to the lender, but may also be willing to provide you with a copy. The letter must be created on official letterhead belonging to the bank; The lender may also make a phone call to the bank to verify that the letter is legitimate and that the funds are there. Verification of the deposit will be kept with the loan application for future reference.
The reason why a verification of deposit is often required is because it allows the lender to see that the potential borrower has the ability to pay a down payment on what they are purchasing, and can indicate whether he or she has the ability to make payments. monthly. This, combined with a credit score and credit report, can tell the lender whether the borrower is a good credit risk and is likely to repay the funds as agreed. If the lender discovers that the borrower has lied about the amount of funds or the existence of certain accounts on their application, the lender will likely reject the loan application on the spot.
Some people also use the term “deposit verification” to refer to a receipt given by the bank after a customer makes a deposit into an account at the bank. This is usually a paper receipt that should be kept until after the monthly statement is received, showing that the funds are in the account and in the correct amount. Some banks also offer email deposit verifications and can automatically send emails to the bank customer when a deposit is made to an account, or when a withdrawal is made as well. This can be a good way to keep track of account activity.
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