When determining your ability to qualify for a mortgage, a lender looks at what is called your “debt-to-income” ratio. This is the percentage of gross monthly income (before taxes) that you spend on debt. This includes your current monthly housing cost, including principal, interest, taxes, insurance, and homeowner’s association fees, if any. It also includes your monthly consumer debt, which is credit cards, student loans, and installment loans.
The source of funds for your down payment and the closing costs are of concern to the lender when it comes time to review and approve your loan package. Most commonly the lender will ask you to provide them with a statement of your liquid assets for the past two or three months. This includes checking and savings accounts, money market funds, certificates of deposits, stock statements, mutual funds, and even your company 401K and retirement accounts.