What is the purpose of a Verification of Deposit (VOD) in mortgage lending?

The Verification of Deposit (VOD) serves a critical function in mortgage lending by providing verification of the status and balance of a borrower's financial accounts. This document is typically requested from a bank or financial institution and confirms how much money a borrower has in their accounts at a given point in time.

The accuracy of the VOD is essential for lenders because it helps them assess the borrower's financial health and their ability to manage the mortgage payments. It ensures that the funds stated by the borrower are indeed available and helps to paint a clearer picture of their financial situation, which can impact lending decisions, the amounts approved, and the likelihood of repayment.

This document is not related to the borrower's credit score, which is generally assessed through credit reports instead of VOD. Additionally, it does not certify the property's appraised value or confirm employment history, as those aspects pertain to different areas of the loan approval process. The focus of the VOD remains strictly on the borrower's current assets in their financial accounts.