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New Contributor
Posts: 157
Registered: ‎01-09-2013
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Question regarding seasoned funds and a mortgage

Hello, new to the boards, ive been researching my "possible scare" for the last few weeks. Only to find nothing regarding my exact issue, im sure it exist but google is not helping. Anyways to my question:

We are applying for a mortgage after being gifted 80k for a downpayment for my wifes graduation from her grandma. I had no real time to prep my finiances to get everything in order before we were off looking at houses, and signing a contract on a home we fell in love with. She has been in school for the last 5 years, and recently accepted an offer for a local hospital in dallas. The LO has ok'd this by saying the school if your major is in the field you are going in, can count as work history. My one issue is with seasoned funds, closing cost/downpayment are all covered under our gift (100k but we are keeping 20 of it to furnish/close). Prior to mid decemember I had not had a company credit card, and did alot of petty cash reimbursments/cash deposits somewhere in the neighborhood of 700-1500 a month. Are they even going to look at these funds considering the gift covers everything (downpayment/closing costs).

Lender Pull EQ 745 EX 734 TU 722
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Question regarding seasoned funds and a mortgage

You typically cannot use gifted funds for a downpayment and closing costs; however, there are programs that exist where you can. You need to talk with a mortgage broker to explore your options.

Wow!!!! That is a really nice gift from grandma! :smileyhappy:
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
New Contributor
Posts: 157
Registered: ‎01-09-2013
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Re: Question regarding seasoned funds and a mortgage

I appreciate that, my actual question was more about the seasoned funds (cash deposit/petty cash reimbursments) I know I can use the gift money for Down Payment and Closing costs, and I dont need to bring my own money due to the fact its 30%. I just dont know if im going to be asked to explain those deposits, or if it wont be an issue due to the fact the funds are sourced through the gift already.

Lender Pull EQ 745 EX 734 TU 722
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Question regarding seasoned funds and a mortgage

You may have to write a letter of explanation as they will request a recent bank statement from you but I don't foresee any issues as it was just a reimbursement for using your own funds for work. This happens all the time in the corporate world. I wouldn't worry at all.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Frequent Contributor
Posts: 378
Registered: ‎03-31-2012
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Re: Question regarding seasoned funds and a mortgage

Hi,

 

I typically run 4-7 K through my corporate card a month.  I am reimburst via my personal checking and then pay AMEX directly.

 

I had to write a short letter stating this was the reason for the fund movement.  The underwriter did not care. 

Valued Contributor
Posts: 1,146
Registered: ‎11-30-2012
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Re: Question regarding seasoned funds and a mortgage

It's been my experience so far that the underwriter is just looking for explanations, not for reasons to deny you. Meaning, they just want to know what's going on, so if you can explain it and it makes sense, it shouldn't be a problem. In this situation, it sounds like the transactions are legit so it should be ok. 

Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: Question regarding seasoned funds and a mortgage

I could be totally wrong about this.

 

But I think they want the min down payment to come from your own funds. Anything above that can come from anywhere.

Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: Question regarding seasoned funds and a mortgage

FHA loans will allow 100% gift money for downpayment and closing costs. There are a few rules to who can provide the gift funds.
 
The person who is gifting you the money must sign a letter (usually given to you by your broker or lender), stating that they know this is a gift and does not have to be paid back.
 
There has to be a paper trail (or electronic) to prove where the money came from.
Good Luck
May all your dreams and wishes become a reality!
New Contributor
Posts: 157
Registered: ‎01-09-2013
0

Re: Question regarding seasoned funds and a mortgage

Can't you have gifted money for a conventional loan as well as long as it is 30%?
Lender Pull EQ 745 EX 734 TU 722
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: Question regarding seasoned funds and a mortgage

Conventional purchases require the buyer have a minimum of 5% of the purchase price as their down payment.

 

The buyer must also qualify for monthly mortgage insurance with less than 20% down.

 

The minimum 5% must be the buyer's own funds.

 

Once the first 5% of the buyer's own funds are verified, a gift can be used for the remaining down payment and closing costs.

 

If the buyer puts 20% or more down, the entire down payment may be a gift.

Good Luck
May all your dreams and wishes become a reality!
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