Cash Deposits

[Dandre2fly]

If I am pre approved today and I put a offer for new construction property and it takes 6-6.5 months to build if I make a 5k cash deposit today will they ask me about it, or will it be seasoned enough by the time I get to closing?

[Anonymous]

We are doing new construction as well and at the time of the application, our lender asked us for all documents such as 2 years tax returns, 2 months of paystubs, 2 months of bank statements(all pages), copy of ID. I think if your bank statement for this month has cut already, you are fine. 

Our home is scheduled to be ready in August, and our lender mentioned they will want to see bank statements from the time we applied to when they prepare the closing disclosure statement. 

My advice: ask the lender. If you have a good one, they will tell you how to handle the cash deposit. If you can prove how you got it, that's always better. 

[DallasLoanGuy]

all funds must be sourced OR seasoned for 2 months.

sourced: we determine that the cash is from an acceptable source

seasoned: the deposit doesnt show on the last two bank statements

[kc0039]

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@Dandre2fly wrote:
If I am pre approved today and I put a offer for new construction property and it takes 6-6.5 months to build if I make a 5k cash deposit today will they ask me about it, or will it be seasoned enough by the time I get to closing?

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It'll be seasoned enough by the time you're at closing. Most, if not all, lenders will ask for 2 months of statements.

[Anonymous]

If you put down a deposit they will need to see where the funds for the deposit came from so they will see the cash deposit on your statement when you show where the deposit came out of your account.

[Anonymous]

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@DallasLoanGuy wrote:

all funds must be sourced OR seasoned for 2 months.

sourced: we determine that the cash is from an acceptable source

seasoned: the deposit doesnt show on the last two bank statements

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I greatly appreciate the feedback from the LOs - however - being soon-to-be first time homeowner - I do have some further, more detailed questions on the 'sourcing' and 'seasoning' (S&S) tests.   Should be easy to answer (I would imagine)


1. Regarding the last 2 Deposit Account (checking/savings/money market) statements requirement - Do ALL deposits to the the Deposit Account appearing on these 2 statements need to pass the 'source' test?
   
   Even if the deposit appears on the last 2 statments YET is greater than 2 months old at the time of review?   

2. Is there a hard requirement for the mortgage applicant to submit the last 2 months statements of ALL deposit accounts in his/her name - or just ones that will be used to qualify for the mortgage?

3. If a deposit on one the statements fail the 'sourcing' and 'seasoning' tests what happens?
   
   Is the deposit merely excluded from the eligible funds for the mortgage qualification calculation?

4. Will the lender request or demand the applicant provide 'sourcing' documentation for the deposit that failed the S&S tests?

5. If the applicant is unable to provide adequate 'sourcing' information for the deposit, can the applicant just request that the deposit be excluded from the mortgage qualification calculation?

6. What is considered 'adequate' sourcing for a non-seasoned deposit?


Additional
a. Note that I'm not a criminal/etc - just a very curious person who wants to understand something thoroughly before beginning a process.
b. For the questions above it should be assumed that there no criminal activity (or suspicion thereof) actually peformed by the applicant.