If you are trying to obtain a mortgage or some other kind of loan, pooled assets can be a great way to improve the number of assets that you have, without having to get a joint loan or find some other solution that may not be ideal. Essentially, pooled funds refer to an account that the borrower shares with someone who is not borrowing. A common example of this situation is a joint checking account shared by a husband and wife. Though the wife may be the only person in the partnership borrowing, the pooled funds account can still counted as an asset.
Why is this important? Until recently, most lenders would look at funds in a joint account as a gift. If the borrower had not deposited all of the funds himself, any money in that account from the joint party would be looked at as a gift. This can complicate the borrowing process and make it difficult to find a lender who will appropriately take those assets into consideration.
However, most lenders have also changed their approach to pooled assets, making it easier to get a loan or mortgage, as long as both parties in the joint account or other form of pooled asset are related. Again, most lenders will require some sort of written document from the borrower that says:
- The joint account is held by two people who have lived together for more than a year
- Those two people will continue to live together
- Both agree that their funds can be pooled
- Defines the relationship between the person looking to borrow money and the other party
- Where the pooled funds have come from (income, winnings, etc.)
Using pooled assets is now much closer to using normal assets when trying to get a home loan (or other type of loan)—which makes it easier for those with joint accounts to get the mortgages they want or need!