Do you remember that scene in the last season of AMC’s Breaking Bad where Walter White is sitting in his storage locker with piles and piles of cash? Having this much money actually becomes a problem for the Whites because it is so much cash that they literally don’t know what to do with it. Maybe Walter could spend some of the money by putting it down on nice homes for his family members/friends. Unfortunately this is not possible because this money is considered “mattress money”.
Although most people earn their money in more legitimate ways than Walter, many people who keep large amounts of cash at home rather than in the bank are in the same situation when it comes to buying a home. To obtain a mortgage in the US you must use money for the down payment and closing costs that is sourced and seasoned. What does ‘sourced and seasoned’ mean exactly? In a nutshell this is money that has been in your bank account for longer than 60 days and can be “sourced” to show where it came from.
So take this example. Walter White has $200,000 that he wishes to use towards a mortgage he puts this in an account once he is pre- approved. Will this count? Unfortunately not, money that has not been in an account for 60 days needs to be sourced to a “legal” source of income. If the money cannot be “sourced” it cannot be used.
In addition to using money that is sourced and seasoned home buyers obtaining a mortgage must also sign a document verifying that none of the money used in the purchase of the home has been laundered or gained through illegitimate means.
If you have any questions about mortgage qualification, sourcing and seasoning money for a mortgage, or anything else please give us a call we are happy to help. Treadstone Funding is your premier local mortgage lender in Grand Rapids, MI.