Unique question about seasoning a gift

[bojangles886]

Hi All,

Been searching the forums for the past couple weeks but cannot seem to find anyone in the exact situation I am in.

I received a gift my previous bank statement (December). In my current bank statement (January) I used half of the gift to pay off outstanding credit card debt, and transferred the other half into a brand new savings account that I opened in the start of December that has not had any statements close yet. The savings account money will be the only money used for downpayment closing costs etc.

My question is, in order to properly let it season and not have to bother my parents with paperwork and bank statements etc, do I need to let the statement for Feb and March be my 2 statements (money will be seasoned, and no large transfers to credit cards or between accounts) or will it make a difference if I give Jan and Feb (this will show no large deposits to checking, just large out going to credit cards, and a large amount followed by smaller normal from paychecks into savings).

If relevant, my scores are high 700/low 800s and I am technically in no rush to move out (lease ends in October but I am fairly impatient). Down payment should be roughly 7-10% and would like to go conventional.

[Anonymous]

OOO I am curious about this as well!

[kc0039]

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@bojangles886 wrote:
Hi All,

Been searching the forums for the past couple weeks but cannot seem to find anyone in the exact situation I am in.

I received a gift my previous bank statement (December). In my current bank statement (January) I used half of the gift to pay off outstanding credit card debt, and transferred the other half into a brand new savings account that I opened in the start of December that has not had any statements close yet. The savings account money will be the only money used for downpayment closing costs etc.

My question is, in order to properly let it season and not have to bother my parents with paperwork and bank statements etc, do I need to let the statement for Feb and March be my 2 statements (money will be seasoned, and no large transfers to credit cards or between accounts) or will it make a difference if I give Jan and Feb (this will show no large deposits to checking, just large out going to credit cards, and a large amount followed by smaller normal from paychecks into savings).

If relevant, my scores are high 700/low 800s and I am technically in no rush to move out (lease ends in October but I am fairly impatient). Down payment should be roughly 7-10% and would like to go conventional.

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It depends on the program. With conventional loans, ask the banker that opened up your account to confirm when the account opened. Ask for a statement history of the savings account (since you don't have the 1st statement yet) and have the banker stamp, sign and date. Provide December and January bank statement  that you closed (it's your own account right?). Gift will be seen with December statement. If you have a copy of the cleared check and a gift letter, then that will be the end of providing documentation for that account.

Government loans such as FHA, VA, USDA, ask your parents for a copy of their statement (all pages) showing the money coming out of the account in addition to above.

Now, to answer your question, it will depend on your lender because it varies, but for me, I'd request the 1st statement for the savings, the January statement for the account you closed, and a letter signed and stamped by your banker stating the account ending in XXXX was closed and the funds were transfered to the new account XXXX which collaborate the docs your provided.

[bojangles886]

Thanks kc. To be clear though I’m not closing my checking account. In fact there will be normal transfers (from payroll after bills have been paid) from my checking to my savings for the foreseeable future. The gift letter and cleared check will not be an issue but my parents may be a little over paranoid about giving up many months of bank statements, but based off what you said is that only for FHA and not convential?

Another question as I was thinking about it, if I have say 10k in my savings and the gift was 20k (15k to pay off cc debt, 5k to xfer to savings along with 5k from Christmas gifts and saved over the last monthish), god forbid they disqualify it if my parents really don’t want to let someone go through their statements, how much would they remove from my ability to put down? Would it be just the 5k they can see or take the first 20k(future as well).

I know it’s very unlikely as I will most likely just let it season, or convince my parents if needed, but I’m just trying to be prepared for any and all possibilities.

[kc0039]

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@bojangles886 wrote:
Thanks kc. To be clear though I’m not closing my checking account. In fact there will be normal transfers (from payroll after bills have been paid) from my checking to my savings for the foreseeable future. The gift letter and cleared check will not be an issue but my parents may be a little over paranoid about giving up many months of bank statements, but based off what you said is that only for FHA and not convential?

Another question as I was thinking about it, if I have say 10k in my savings and the gift was 20k (15k to pay off cc debt, 5k to xfer to savings along with 5k from Christmas gifts and saved over the last monthish), god forbid they disqualify it if my parents really don’t want to let someone go through their statements, how much would they remove from my ability to put down? Would it be just the 5k they can see or take the first 20k(future as well).

I know it’s very unlikely as I will most likely just let it season, or convince my parents if needed, but I’m just trying to be prepared for any and all possibilities.

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That's correct. Government loans will only require those. Keep in mind, if you go with a conventional loan,  different lenders will have different rules. The rule for conventional loans are that we don't need to see the statements of the gift donors. We just need to see the gift letter, copy of the check, and the money going into your account which you have those already.

They will use whatever is on  your statement. If your ending statement states that you have $15,000 in there, we'll use $15,000. That would be the end of it unless your statements have some funky transactions which I can't see since I'm not your lender. Some lenders near closing will ask for an updated statement to show you still have the funds to close. I'm one of the ones that don't as your statements that you provided show you can cover the downpayment and closing costs, then all is well.