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FHA streamline refinance question

I am in the midst of applying for an FHA streamline refniance on my home.  I made it through to conditional approval from the underwriter, but they want a letter of explanation regarding a large deposit, as well as my updated bank statement.  What do they look for in the bank statement?  Basically, what could get me denied at this stage?  The large deposit is a withdrawal from my retirement account, which I used to pay down credit card debt and I have documentation that it is not a loan. 
  • November 20 2012 - US
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Answers (2)

It is very standard to have to verify large deposits.  I would provide the documentation and not worry about the loan being denied.

  • November 21 2012
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Don't fret! Letter's explaining large deposits are very typical.  Underwriter's are looking to verify that you have sufficient funds to close and, if necessary, reserves to qualify.  Any large cash deposits will require proof of where it came from as well as a short letter explaining that.  The chances of you getting denied are extremely slim.  You may have to provide documentation that proves it was a withdrawal from your retirement, as well as the 'terms of the withdrawal', the check recieved from the retirement, and the letter.  You should be ok, best of luck!
  • November 20 2012
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