How to Buy Your Home Through a Deposit Loan Program

” Tomorrow is not a reflection of what happened to you yesterday but rather what you chose to do today.”

– Author Unknown

Would you like to raise your credit score in a hurry?

Did you know that there is a program that will give you the appearance of greater assets and payment history that can be acquired from any bank?

I have been telling people for years; Know the rules before you play the game. This, and various other strategies that I write about, are what the wealthy have been doing to achieve their riches. They learned the strategies and techniques necessary to get what they want and need in life. You can do it too. You just need to learn how.

What I write about gives the reader a foundation to build further studies upon and spark, hopefully, something within that makes you want to learn more about a topic.

Increasing your credit score by 40 points and lowering your interest rate by 2% can save you over $100,000 on a 30 year mortgage. Additionally, the higher your score, the less you may have to put down as a down payment.

For example, if your score is between 500 and 619, you will typically have a down payment of 30%. However, if your credit score is between 620 and 699, your down payment could be as low as 5%.

Consumers with a score of 620 to 699 typically do what are known as SIVA (stated income verified asset) loans. They state their income and must verify that they have some type of asset such as savings or retirement account, CD’s, or an annuity.

Consumers that do not have any or enough reserve assets can use a little known method called a Deposit Loan Program.

Here’s how it works.

A bank associated with a Deposit Loan Program deposits $25,000 or more into a bank account in your name and using your social security number. The account is deposit only therefore you cannot withdraw any of the funds.

The only purpose of this account is to make it appear as though you have some type of asset that the bank can verify. The borrower simply lists the bank account on their loan application and the lender contacts the bank and requests a verification of deposit (VOD)

Once the VOD is received, the problem of having no reserve assets is solved. In addition, if the lender requires that the VOD be seasoned (aged a number of months) or sourced (closing costs paid through account) these things can also be handled for a nominal fee.

Deposit loan programs charge a monthly interest rate for this service. This is where they make their money. Let’s say that they charge 1% of the $25,000 example. That would mean that they earn $250 per month. Let’s also say that the minimum term of the loan is 3 months. The total interest paid would be $750.

Another great feature of this program is that once you make your first payment. The account reports to the credit bureaus as a current installment loan.

Deposit loan programs are an excellent tool to build your credit quickly. Once you make your final payment, using our example of 3 months, the account gets reported to the credit bureaus as a paid installment loan of $25,000.