Home > Uncategorized > Mortgage Mistakes… “Seasoning” (not salt and pepper) your assets…

Mortgage Mistakes… “Seasoning” (not salt and pepper) your assets…

All the money involved in your mortgage transaction needs to be “seasoned”.  “Seasoned” simply means it is YOURS and has been yours, and in your account for the last 60 days. 

Many people don’t realize that you cannot deposit unaccounted for money into your account for your mortgage closing.  ALL money has to be accounted for and where it came from.  Why?   The lender wants to see this is YOUR money and not borrowed.  Did you borrow the money and will have a repayment obligation that may affect your ability to make your mortgage payment?  Mortgage closing funds cannot be borrowed and cannot have any repayment associated with it.   Believe it or not, the biggest issues lenders have is FIRST payment default so any large deposits throw up a big red flag. 

With FHA loans, your mortgage closing funds can be a GIFT but remember, we do not give “gifts” with the intention of getting one in return (or at least most of us don’t).  Gifts are (according to Webster)  “something voluntarily transferred by one person to another without compensation”  But ONLY on an FHA loan can you use gift funds towards your mortgage closing.   IF you are in a conventional transaction, gifts are only allowed if you have 5% of your OWN money PLUS another 15% as a gift, at a minimum.   There are strict rules around gifts, where they can come from and who can give them.  Be sure to discuss this with your mortgage loan officer.

On a side note, many borrowers don’t borrow money or receive a gift however, they MOVE their own money around.  From one bank account to another.  In and of itself this is not an issue however, we have to account for ALL deposits into your bank accounts so we need a papertrail of where the money came from (proof from bank statements).

A good rule of thumb: Just dont borrow, receive a gift or move any money within 60 days of your mortgage closing without discussing it with your mortgage loan officer first.  It is much easier to control the specifics than it is to unravel what has already happened.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!





NMLS #162494

AZDFI Loan Officer # LO-0911453

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