Question lenders! Will a large cash deposit cause issue w/ loan?

[James Viglione]

Question for all you knowledgeable & helpful lenders out there!

Over the years, I have a semi-substantial sum of cash saved that I’ve been storing in a safe. Now that I’m looking into purchasing an investment property, I’m considering depositing a large portion of it, if not all, into my bank account so I can have it ready to deploy towards the down payment.

My concern is if I make a large lump sum deposit in cash, it will likely be viewed by the bank/lender as unverified funds and cause a hiccup in the loan process. Have any of you encountered a similar situation like this and how did you navigate forward? Would it be possible to apply these funds towards the down payment without issue once it’s been properly seasoned in my account for 90 days (perhaps with a signed declaration from myself stating it’s origins and that it’s not from an outstanding loan/gift from family?) or would it be denied on the skepticism that it may be a gift from family, outstanding loan, etc?

Thanks!!

[Robin Simon]

Quote from @James Viglione:

Question for all you knowledgeable & helpful lenders out there!

Over the years, I have a semi-substantial sum of cash saved that I’ve been storing in a safe. Now that I’m looking into purchasing an investment property, I’m considering depositing a large portion of it, if not all, into my bank account so I can have it ready to deploy towards the down payment.

My concern is if I make a large lump sum deposit in cash, it will likely be viewed by the bank/lender as unverified funds and cause a hiccup in the loan process. Have any of you encountered a similar situation like this and how did you navigate forward? Would it be possible to apply these funds towards the down payment without issue once it’s been properly seasoned in my account for 90 days (perhaps with a signed declaration from myself stating it’s origins and that it’s not from an outstanding loan/gift from family?) or would it be denied on the skepticism that it may be a gift from family, outstanding loan, etc?

Thanks!!

Generally will depend on the type of lender that you are going with. For a conventional lender / bank / credit union, which are the most heavily regulated and scrutinized, it has a larger chance of being an issue. If you are going with a private / lower doc lender, such as hard money or DSCR, it is less likely to be an issue and likely can be satisfied with a well done Letter of Explanation