How Long Does Money Have To Be In A Bank Account?

By
Real Estate Mortgage Broker with The Mortgage Experts at America's Mortgage

Borrower funds used for the down payment, closing costs, and reserves must be "seasoned" for two months before they can be used to qualify for a mortgage.  This means the borrower must be able to provide proof that the money has been in their account for two months.  Cash on hand is not an acceptable source of funds for most loans.  If someone is going to use cash on hand to qualify, they need to put the money in the bank as soon as possible.  

If a borrower has a joint account with someone who is not a borrower, the money in that account can be counted, provided the person who is not the borrower states that the borrower has use of all the money in the account.  The money must still be seasoned for two months to count it. 

A borrower can also receive a gift from a relative for certain types of loans (most notably FHA loans).  In the case of a gift, the money does not have to be seasoned.  It must be deposited into the borrower's account before the loan can get a final approval, but it does not have to be in the account for a full two months.  One day is fine.

close

Re-Bloggged 1 time:

Re-Blogged By Re-Blogged At
  1. Darlene Masucci 11/05/2009 12:06 PM
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the clock to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Topic:
Lending / Financial
Location:
Colorado
Groups:
Colorado Realty Bloggers
Tags:
mortgage tips
seasoned funds

Comments 5 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the flag to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainer
34,550
Kenneth Young
Uni International LLC

Good answer to a question that buyers have.   I wouldn't have had a correct answer on that...

October 16, 2009 03:45 PM
Anonymous #2
Anonymous
Casey

Me and my husband are in the process of a conventional loan application. The loan is for 250,000 we are getting a loan for 225,000. My mother in law gave us 31,000 towards home expenses so we are not coming in with 5% of our own expenses. At what point is the money considered seasoned? It will have been in our account for 3 1/2 months before closing can we argue that it is seasoned money from the time of deposit to the closing table?

May 08, 2012 05:26 PM
Rainmaker
123,606
Chris Thomas
The Mortgage Experts at America's Mortgage

Casey - The money needs to be in your account for 60 days prior to the loan approval date in order to be considered seasoned.

Chris

May 11, 2012 07:31 AM
Anonymous #4
Anonymous
Laura

We just entered contract with a 45 day escrow and Chase pre-qual, my buyer went to Chase to submit loan application this morning and it turns out that he deposited more cash into his account, to increase his down payment. Now lender wants me to extend escrow stating they need new funds to be seasoned 60 days, because it was cash. So does this mean I ask for a 60 day escrow?  Or longer? How long after 60 days of "seasoning" will lender close on this transaction (given there are no more hiccups)? LO doesn't seem to know. :-(

July 11, 2012 04:01 PM
Rainmaker
123,606
Chris Thomas
The Mortgage Experts at America's Mortgage

Laura - Generally speaking, you need to show that money has been in an account for 60 days.  That means you'll have to get a bank statement showing that, and then the statement will have to be sent to underwriting for approval.  How long that takes depends on the lender.  If the LO doesn't know enough to pick up the phone and talk to the underwriter to get an answer to this question, then the borrower should get a new LO.

July 11, 2012 04:15 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the sunglasses to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
123,606

Chris Thomas

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the printer to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

Widely recognized as the leading source of accurate mortgage and credit information in the Metro-Denver area, and the people to call when you need a great mortgage.