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Down Payment On Mortgage (Cash/Stock)


Jack81721
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Hello,

 

I typically do not keep much cash in my back account. However, I have large positions in a brokerage account.


Say I’m looking to buy a 1M home. I have a 200K stock/index position I’d like to liquidate and use as down payment.

 

However, I do not want to liquidate this position before I’ve found the deal and had my offer accepted. Would the investments need to be liquidated before a pre-approval?

 

In other words, do mortgage brokers care if the funds are in stock or cash?

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You're fine to keep the funds in your brokerage account until they are needed to be brought in at closing, no need to transfer them for the pre-approval.  Prior to closing you'll need to provide your loan officer:

 

1.  Last 2 monthly statements for the brokerage account

2.  Last 2 monthly statements for your checking/savings where you'll eventually be transferring the money to

3.  You'll also need to document the paper trail of the funds going from the brokerage account to checking/savings, usually by providing an account activity printout from online showing the withdraw from the brokerage and the deposit into checking/savings

 

If you haven't already, then I'd ask your brokerage if there is any way they can wire the funds directly to the title company/escrow company/closing attorney.  If so, then you won't need to document #3 above since the funds wouldn't pass through your checking/savings.

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