Recent account deposit that meets a program threshold or otherwise requires mortgage source-of-funds review.
A large deposit is a recent account deposit that meets a mortgage program’s review threshold or is significant enough to require a source-of-funds explanation. The purpose of the review is to determine whether the money is acceptable and whether it created an undisclosed debt.
Large does not simply mean “unusual to the borrower.” Programs can define the term differently, and automated asset validation can identify the specific deposits that need documentation.
Money used for a down payment, closing costs, or reserves must come from an acceptable source. A deposit from payroll, a verified transfer, a permitted gift, or a documented asset sale can be acceptable. An unsecured loan may create a new monthly obligation or be prohibited as a source for the required borrower contribution.
An unexplained deposit does not automatically deny the mortgage. The lender may document it, exclude the unsourced amount from usable assets, or determine that enough verified money remains without it. The result depends on the transaction and loan rules.
Large deposits are identified during Bank Statement Review or electronic asset verification. The question is most important on purchases when the deposit is needed for Cash to Close or reserves.
The lender may ask for statements from the sending account, a gift letter and transfer evidence, a bill of sale, payroll records, a tax-refund record, or another document suited to the source.
Under Fannie Mae’s conventional guidance, a single deposit exceeding 50% of the loan’s total monthly qualifying income is treated as a large deposit when bank statements are used. Other programs and lenders can use different standards, and validated electronic reports can produce deposit-specific findings.
| Deposit pattern | Typical review result |
|---|---|
| Payroll or tax refund clearly identified on the statement | May need no further explanation when the source is clear |
| Transfer from another verified borrower account | Connect both sides of the transfer |
| Gift funds | Document donor eligibility, gift terms, and transfer as required |
| Sale of a vehicle or other asset | Document ownership, sale, and receipt of proceeds |
| Cash deposit with no documentary trail | May be excluded from usable assets |
| Borrowed money | Evaluate source eligibility and any new monthly debt |
The named 50% rule is a Fannie Mae example, not a universal definition of large deposit across all mortgages.
Sofia has $7,000 in total monthly qualifying income. Her purchase account receives a $5,000 deposit, which exceeds half of that monthly income.
She documents $4,200 as a transfer from another verified savings account, leaving $800 unexplained. The lender evaluates the unsourced portion under the applicable rules. If it cannot be accepted, the lender can reduce Sofia’s usable account balance by $800 and confirm whether the remaining verified funds still cover closing and reserves.
The entire $5,000 deposit does not necessarily become unusable merely because part of it lacks documentation.
A Letter of Explanation tells the underwriter what happened. Supporting documents prove the explanation. A statement saying “money from savings” is weak if the sending savings account is not shown; a statement plus matching account records creates a verifiable trail.
Borrowers should avoid depositing cash or moving funds through several accounts shortly before closing when a simpler documented path is available. The goal is not to hide activity but to keep the evidence understandable.