Down payment

[StartingOver10]

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@RhubarbPie wrote:

The answer is not entirely cut and dry. While you can't just say "I want a loan for my downpayment", you can add things like a sellers assist to your offer to cover part of the downpayment. For a random example, if you offered $206,000 with 5% down (approx $10,000) and a $6000 sellers assist, that would mean that your purchase price is 206K but the sellers would essentially give 6K of that back to you, which you could then apply to your downpayment, bringing your out of pocket downpayment to $4000. You have essentially rolled a portion of your downpayment into your loan. The amount of sellers assistance that you can request is based on a number of factors which your bank can go over with you but its usually between 3% and 6% of the sales price. Of course, the house will then have to appraise for the purchase price including the assist. 

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Sellers assistance is for closing costs and prepaid expenses only. Not down payment. The lender will have to see where you are getting the down payment from: gift, savings, cash flow, 401k, etc. But not the seller.

[Anonymous]

If you had stock and sold them, could you use that money as downpayment?

[StartingOver10]

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@Anonymous wrote:

If you had stock and sold them, could you use that money as downpayment?

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Yes, because it is your asset. You can show a papertrail of the entire sales transaction of the stock.

[Anonymous]

:-) thanks for the info!

[Anonymous]

I guess my next question would be, how long does the money need to sit in my bank account before I can use it? I read somewhere lenders look for seasoned money? Is that true?

Cheers!

[StartingOver10]

If you can produce a papertrail - like the sale of an asset (stocks, bonds, real estate etc) you don't need to season the funds.

If you can not produce a papertrail, then you will need to season the funds.

Large cash deposits are a no-no.

Mattress money is a no-no.

Gift money is fine as long as it can be sourced properly. Donor signs a gift letter and shows the funds coming from donor account to recipient account. Ask your LO for specific gift letter requirements.

[Anonymous]

When applying for a mortgage lenders typically ask for 2 months of bank statements. If the money you are using for closing is on both of those statements, it is considered seasoned. Now the statement can't show a huge cash deposit of the funds, so the money should really be in there 3 months before you start the mortgage process.

[Anonymous]

Sounds good, thank you both for your inputs!