What does a lender typically issue to verify a borrower’s account balances?

A lender typically issues a Verification of Deposit (VOD) to confirm a borrower's account balances. The VOD is a written statement that the lender requests from financial institutions where the borrower holds accounts. This document provides critical information regarding the borrower's savings or checking account balances, as well as the account's status, and any other relevant details that may help assess the borrower's financial standing.

Issuing a VOD allows the lender to validate the borrower's available funds, thereby ensuring that they have sufficient assets to cover down payments, closing costs, and other financial obligations related to the mortgage transaction. This step is essential as it helps mitigate the risk associated with lending by confirming the information the borrower has provided about their finances.

In contrast, a Loan Estimate is a document that outlines the terms of the loan, such as projected monthly payments and closing costs, but does not verify account balances. A credit report assesses the borrower's creditworthiness by listing credit history and outstanding debts, while a loan application is the document in which the borrower provides personal and financial information but does not serve to verify account balances directly. Thus, while all these documents play important roles in the lending process, the VOD specifically addresses the verification of account balances.