Mortgage Navigator • Non-QM Underwriting
Large Deposits & Source of Funds
Alternative income documentation does not eliminate source-of-funds review.
Income analysis vs asset analysis
A deposit may be excluded from bank-statement income yet still need explanation if it is being relied upon for funds to close or reserves. Conversely, a legitimate business deposit may need to be classified correctly for income analysis.
Source early
Transfers, asset sales, business distributions, gifts and borrowed funds can each have different consequences. Review unusual deposits before the file reaches final underwriting.
Investor matrix, not a universal Non-QM rule. Bank-statement calculations, expense factors, DSCR formulas, asset haircuts, credit-event seasoning, LTV, reserves and documentation can vary materially by investor and lender. MortgageDadOf3 separates the concept from the actual program matrix so a lender overlay is not mistaken for an industry-wide rule.
Consumer-purpose loans still require the applicable consumer-protection analysis. For covered transactions, Regulation Z’s Ability-to-Repay framework generally requires a reasonable, good-faith determination of repayment ability. Alternative documentation is not the same thing as “no documentation.”
Consumer-protection references
CFPB / Regulation Z §1026.43 Ability-to-Repay · CFPB Qualified Mortgage explanation · IRS IVES transcript information