We often have borrowers with large amounts of “Mattress Money”, or money that is not in a bank account or “seasoned”. Seasoned funds are funds that have been in an account for at least 2 to 3 months.
Borrowers simply cannot use mattress money for the purchase of a home, as lenders track every dollar that goes into an escrow. Borrowers can replenish depleted “seasoned” funds with mattress money, but that is all.
Borrowers can “give” their mattress money to a relative and then have the relative “give” the money back to them, but even this can get complicated (so be sure to have us guide the process).
Also, as an aside, borrowers can sell their “free and clear” automobiles in order to garner additional “seasoned funds”. Proceeds from a car sale are considered “seasoned”, even if the car was just sold.
We had a borrower sell two cars for seasoned funds recently, and we are pretty sure he bought them right back with his mattress money after we closed.
Founder/Broker | JVM Lending
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