# "Aged Funds"



## plowjockey (Aug 18, 2008)

We took a constant pounding, from our lender, to ensure that ALL of the money we were putting down (plus 6 mos payments) on a rental house, was "our" money and not a recent gift/loan, from someone else.

They scrutinized several months of checking/saving statements, leaving no gaps, looking for large deposits.

We either had to have the _aged funds_ in our accounts for some time, or new money from our recent paychecks. If we sold something significant for the down payment, it had to be documented with the lender.

Is this something new?


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## greg_n_ga (May 4, 2012)

I had a bank do the same to me bout 6 yrs ago. I reckon it must be some sort of tax thingy or something. I suppose it is bad to put your money in a buried mason jar anymore !!


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## Bluesgal (Jun 17, 2011)

Nope not new it's been part of the process since at least the 90"s when I did mortgages. "Seasoned" money is a weird component for qualification from the banks. Even if you convert precious metal coins to FRN's they'll want to see the cash in the account for at least 6 months prior to the purchase. Something about "proving ones ability to save". Total BS but an evil of game.


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## MO_cows (Aug 14, 2010)

It makes sense in a way. It's how they know you have managed your money well, so you are more likely to be responsible with the loan. As opposed to mommy and daddy gave you the down payment and you aren't really invested or committed to the deal because you didn't do it yourself.


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## boxwoods (Oct 6, 2003)

More likely to show that you didn't borrow money from a private person for the down payment. Thus owing the bank mortgage, and also a personal loan.


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## Tinker (Apr 5, 2004)

When we borrowed, we just had to show if the downpayment was a gift (not having to be repaid) or our own money. They want to be sure you are not borrowing the down payment, as 2 new payments might be to hard to pay each month. Just looking out for their own interest, which makes perfect sense, especially in todays real estate market.


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## frogmammy (Dec 8, 2004)

Yep, when we bought this house 20 years ago I had to show papers that some of the $$$ I used was from an inheritance...and that no, mom wasn't going to die again any time soon.

Mon


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## littlebitfarm (Mar 21, 2005)

They didn't do it to me last year when I bought a rental.

Kathie


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## PaulNKS (Jan 11, 2009)

Would it also be partly to blame on whether the bank or mortgage company uses underwriters or do their own underwriting?


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## Pony (Jan 6, 2003)

I remember that even back in the early 80's. It was to make sure that you weren't taking out a loan to get a loan, even if it was from the Bank of Mom and Dad. If it was a gift requiring no repayment, there had to be a letter from the gifter.

Pity they weren't more strict about loans in the 90's and early 00's. We might not be in this horrible situation.


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## Bluesgal (Jun 17, 2011)

PaulNKS said:


> Would it also be partly to blame on whether the bank or mortgage company uses underwriters or do their own underwriting?


Since most loans are sold or "backed" by Fannie or Freddie the underwriting guidelines are pretty much the same. They differ slightly depending on the lender in terms of what they will accept in debt ratios and past issues (except fannie and freddie, those parameters are set) and since the "lender" wants to be able to sell the loan, they stick to those parameters.

"Hard money" lenders have more leeway as it's their money, but they usually charge a higher interest rate. As a comparison, most hard money lenders (at least here in AZ) are charging between 6-8% interest compared to a 30 year rate of 3.49%.


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## edcopp (Oct 9, 2004)

Bear in mind that any time that the government can find a substantial amount of cash that is not in a bank they have a tendency to just take that cash. They will call it "drug money". Often it is counted incorrectly or just gets lost or both.

Now consider that any time that cash shows up at a bank coming or going, the bank Must report that to the government. I think the trigger amount is $10,000. Then it is likely that the government will come looking for the "drug money"

So who needs the Bank, or the Government for that matter.


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## MN Gardener (Jan 23, 2008)

Bluesgal said:


> Nope not new it's been part of the process since at least the 90"s when I did mortgages. "Seasoned" money is a weird component for qualification from the banks. Even if you convert precious metal coins to FRN's they'll want to see the cash in the account for at least 6 months prior to the purchase. Something about "proving ones ability to save". Total BS but an evil of game.


This has been the case since I did mortgages in the late 90's......the bank wants to make sure you haven't taken on any debt for the downpayment and that you have some of your own skin into to transaction.


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