My husband and I currently have a total of 5 bank accounts(1 Joint account and 2 personal accounts). I was made aware that the payment shock funds needs to show an increase in all accounts for six months (please let me know if that’s correct). Does that mean that all 5 of our bank accounts need to increase by the payment shock amount for 6 months, even if these bank accounts are not actively being used? Is there a way to make this process simpler than adding payment shock funds into six different accounts that aren’t actively being used?
The way I understand it is your total balance across all accounts must increase each month. Doesn’t matter which account you choose. If all 5 accounts come to $1000 shock amount is say $500 total balance should be 1500. 2000 the month after.
Take the ending balance on each of your bank accounts and add them up. That total number needs to grow by your payment shock amount.
It’s worth noting that if any of the accounts dip below where they were last month even if the total from all 5 accounts combined meets your payment shock you will most certainly get asked why and probably get asked to show what happened.
It’s also worth noting it is so much easier on the underwriters and you will get fewer questions if you don’t create a separate account for payment shock. Regardless of how you set it up or how well you explain it the underwriters will not not pay attention to that. They will just add up your account balances. So if you transfer money so it appears evident that you have a payment shock account you will actually be asked to explain the transactions and why you keep doing it and why one of your accounts isn’t growing…I had to explain this 3 times in a 6 month period.
To be honest payment shock calculation is simple math.
To hear it explained makes it seem like rocket science. It is not.
As long as you can send LOE to explain any savings pattern to satisfy the underwriter ( the judge and jury) you should be fine.