Each Jan I move a year's worth of income from the brokerage into a high yield savings account, then have a monthly deposit made to our bank checking account. I wonder if this would be sufficient.
I'm guessing not.
1. That account doesn't have enough money to sustain 3 years worth of withdrawals.
2. It's a little bit too transparent. Even though financially withdrawing money from a brokerage account is equivalent whether done in one lump sum (which is then broken down into monthly sums) or simply monthly sums --- it looks different to them.
3. Even though
you are doing it legit, fraudsters could do the same thing, just shuffling the same money back and forth between saving & checking accounts. Even cycle it through 4 or 5 accounts to further obscure the facts. Pretty soon there would be 99 people playing this money-float game for every 1 person like yourself doing it legit. The only way a bank can be sure that you aren't playing this game is to look at just one account --- like a brokerage account with a 6 or 7 digit sum.
I wonder if it matters whether it comes from the brokerage or some other financial institution?
From what I was told, they are looking for a balance in some mainstream financial institution, like stock broker or insurance company or bank, and a 2-3 month history of steady paycheck-like withdrawals and/or a written letter (and confirmation) of instruction for that institution to send you $X/mo.
My broker, one a year they send me a letter saying "This confirms your instructions to send you $X/mo from your account. Unless you direct otherwise, we will continue doing so."
Lenders understand employment and regular paychecks. Your typical loan processor & bank manager & loan underwriter have lots of personal experience with weekly paychecks, and ZERO experience with having a $2,000,000 brokerage account and "paying" yourself whatever you want whenever you want.
The closer your finances look like what they are familiar with and accustomed to, the more favorably they'll look at your loan application. If you want the loan, you need to make them comfortable. And you need to avoid looking to them to be fast-shuffling money around. They got scammed big-time by people with things like stated-income loans, and they don't want to repeat that. If they relax their vigilance, con-men will take advantage of them.
FWIW: On one refi, the bank wouldn't accept a 6 digit balance in a regular brokerage account, but they would accept a (smaller) 6 digit balance in a brokerage IRA. That made no sense, so I asked why. The explanation was "You could take all your money out of the (regular) account the day after the loan closes, and then how would you make the payments?" I pointed out that I could take all the money out of the IRA account, too.
Their response, "That's different. One account is for retirement and the other isn't."
A 6-7 digit account is so far out of their ken that you might as well be discussing the finer points of ancient Crete Linear-B. Give them the info they want in the form that they want. They have the gold, so they make the rules.
