We are often asked how long funds for down payments or closing costs need to “season” before a lender will not question their source.

This question arises when borrowers have funds for which they cannot obtain a gift letter or a paper-trail (most common when borrowers use funds from overseas).

Funds of this nature usually need to season for longer than two bank-statement cycles. This is b/c most lenders request at least two complete statements for every account that is accessed for purchase money funds.

Underwriters will review all statements with a fine-toothed comb and request that every “large” deposit be “sourced” or explained and paper-trailed. If a borrower is unable to paper-trail or source a deposit, he needs to make sure the deposit does not show up on any account statements.

Hence, he usually needs to make sure the deposits are made close to three months prior to a purchase (so the last two account statements do not show the deposits).

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646

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