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Two part question.
My brother is in the middle of bidding on a house with an FHA loan. He basically has what he needs for the downpayment and closing but his mortgage person said while everything looks fine UW could still have an issue with his cash reserves. He was also told gifting would not be possible at this point because the money needs to be "seasoned" for two months. Here are my questions:
1. Is there anyway around having to "season" the gifted money? He makes a great living and if I gave him $5K as a gift and it wasn't "seasoned" but he received his normal $5000 salary check, what stops him from simply using 100% of his paycheck to go into savings (to be counted as cash reserves) and use the $5K I gave him to pay bills?
2. If he needs to raise some cash could he simply sell me somethings? There are actually a few things that I was going to buy off him anyway (couple pieces of furniture and a TV) after he moves as he doesn't need them anymore. How does FHA view this?
I'm not trying to break FHA rules but I just want to know if they can be bent.
Thanks
I had downpayment money gifted to me by my family I ended up going conventional but started out going FHA. During both loan processes the loan officer asked for 2 months bank statements. The gifts showed up in the statements. The loan officer sent me over a form to be filled out (called a "gift letter") and signed by my family and myself saying I received the gift on "day x" and everyone agrees that it is a gift and is not to be paid back. (The bank doesn't want you borrowing money to buy a house). I had to provide a copy of the cancelled check from my family's bank and my bank account statement showing the deposit and the deposit slip from the bank when I deposited the money (I guess an atm receipt would work but I went in the bank.)
If you deposit the money in June and buy a house in September then you don't need to say where the money came from because it is outside of their two month bank record investigation. That is what they mean by seasoned.
As far as selling things, I don't see why this would be a problem. The underwriter would probably ask for a letter stating where the money came from though. He could just write that he had a yard sale and deposited the proceeds.
Good luck.
HOW MUCH DID YOU END UP PAYING FOR CLOSING COST AND DOWN PAYMENT
My parents gifted me the 20% down. I'm on my own if I get married or want to go back to school. LOL
My house purchase price was $140,000. My loan was $112,000 at 5.625%
I had to bring $31,200 to the table. $28,000 of that was the down payment. Seller (actually Wells Fargo since it was a short sale) paid $2800 of closing costs. Closing costs were about $6000. That included 14 months of homeowners insurance ($540 a year) and 14 months of taxes ($980) and the per day interest. I closed on 2/9 so that was 19 days. I also paid one point.
I had a really good loan company. My GFE was almost dead on. I think it was off by about $200. Also, in Delaware, FTHB get a 50% discount on property transfer tax.
With my p&i plus my ins. and taxes, my monthly payment is $765
1. money needs to be 'sourced' or 'seasoned'
loan officer gave you bogus info. time to find a new lender
2. he can sell an asset. yes. but for stuff like furniture? pretty flimsy. go with the gift if the giftor has the money seasoned and can prove it.