Selling Personal Property:
Personal Property - Cars, Antiques,
etc.
Personal property includes automobiles, vehicles,
boats, furniture, collections, heirlooms, antiques,
art, clothing, and practically everything you
own except for real estate. The mortgage application
asks you to estimate the value for these items.
The larger the loan amount, the more important
it is for you to provide details on your personal
property. This is because larger loans usually
indicate larger incomes, and lenders check to
see if your personal property matches your income.
If it does not, this sends a "red flag"
to the underwriter and they take a closer look
at your application.
You are not required to document the value of
personal property unless you intend to sell them
to come up with your down payment.
Selling Personal Property
For those homebuyers who do sell personal property
in order to come up with their down payment, the
verification process can be arduous. Lenders are
much stricter about documenting this method of
coming up with your source of funds.
Selling a car is perhaps the easiest to document.
First, you need to photocopy the registration
that shows you actually own the vehicle. You will
have to provide a copy of the page in the "Blue
Book" that shows your model and its value.
Then you need to photocopy the bill of sale showing
the transfer to another individual and a copy
of the check used to purchase the vehicle. Do
not get paid in cash because that makes it impossible
to show you actually received the funds. Make
a copy of the receipt when you deposit the funds
into the bank.
Other types of personal property are more difficult
because you have to show that you actually own
the property and that it actually has the value
that you sold it for. This is a little harder
to do for most assets than it is for automobiles.
If you have records to show you purchased the
property, that would be helpful. You could also
provide an old inventory that documents ownership.
To determine value, you may have to contract with
an independent appraiser or a specialist who has
the knowledge for that particular type of property.
If you cannot document the item’s value,
the lender will not view the sale as an acceptable
source of funds. Just like selling a car, you
have to prove you own the item, make a copy of
the bill of sale, copy the check used to purchase
the item, and make a copy of your receipt when
you deposit the funds into your bank.
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