Seasoned funds are money that has been sitting in your bank account for at least 60 days before you apply for a mortgage. Lenders consider these funds as verified savings.
Any large deposit under 60 days old requires documentation showing where the money came from, such as a sale of an asset, a gift, or a transfer from another account.
Seasoned funds simplify your mortgage application because they are assumed to be your own savings. The fewer recent deposits you need to explain, the smoother the process.
What Seasoning Means
Seasoning means money that has aged in your account long enough that lenders do not question its source. The standard seasoning period is 60 days. Money in your account for 60+ days is considered seasoned.
The 60-Day Rule
Any deposit over 50% of your monthly income that appears within 60 days of your application must be documented. This is called a large deposit. You must trace where it came from with a paper trail.
Documentation for Recent Deposits
For recent deposits, you need: a copy of the check or wire confirmation, a bill of sale if you sold an asset, or a gift letter if it was a gift. Cash deposits can be very difficult to document.
How to Handle Large Deposits
The best strategy is to move any large sums into your account at least 60 days before applying. This avoids documenting every deposit. Plan ahead with your loan officer.
Gift Fund Seasoning
Gift funds have their own seasoning rules. The donor's check must typically clear and sit in your account for a full statement cycle. Some lenders require the gift to season for 30 days.
Seasoning Strategy
To streamline your application: deposit large sums early, keep records of all deposits regardless of age, avoid cash deposits if possible, and ask your loan officer what documentation they expect.