Your Assets for loan

Your lender need to know what kind of assets do you have to give you a loan. First and foremost, you need to make sure the assets belong to you and you have access to them. Sometimes first-time home buyers share a savings or money market account with their parents. Even though your name might be on the statement, a lender might split that asset between you and your mom. Let’s say you have a checking account with your mom that you used all through college, and now there’s about $12,000 in the account that you plan to use for a down payment. If your mom’s name is on the account, you may only get credit for $6,000. If this happens to you, have your mom turn over that account to you by writing a short gift letter stating, ‘‘I’m giving all these funds to my wonderful son so he can buy a house.’’ Any asset you list needs to be all yours.

Another consideration may be how ‘‘liquid’’ the asset is. If you have a retirement account worth $50,000 but can’t get to it unless you retire, it’s not liquid. You can’t get to it and therefore can’t count it toward buying your home. Some accounts let you cash them in but do so only under a penalty. If you can get that same $50,000 for the purposes of buying a home but there’s a 10 percent penalty if you do that, then the lender might also deduct that 10 percent, which leaves $45,000. Be careful that you understand the tax and penalty implications of tapping retirement accounts by speaking with a good tax accountant or financial planner.