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Sale of Personal Asset

Sale of personal assetProceeds from the sale of personal assets are an acceptable source of funds for down payment, closing costs, prepaids, and reserves. Typical mortgage lending guidelines require that the following be documented when this occurs:

  1. The individual purchasing the asset is not a party to the mortgage transaction.
  2. The borrower’s ownership of the asset is proven (copy of the title).
  3. The value of the asset is determined by an independent third party (such as an appraisal, a Kelley Blue Book report, an Edmond’s Appraisal, etc.).
  4. Bill of sale signed by both the seller and the purchaser of the asset; click here for a generic bill of sale from the Wisconsin DMV if you’ve sold an automobile.
  5. Proof the ownership transfer occurred (usually a copy of the title signed by both parties).
  6. Receipt and availability of the sale proceeds. Typically, this is a cashier’s check from the buyer. NOTE: Cash is not acceptable as there is no paper trail.

 

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