What is mortgage seasoning?

Seasoning for a mortgage generally refers to the amount of time a bank wants to see funds being in your accounts that you may use for down payments or closing costs.

If you plan to receive a gift of funds or if you received a large sum of money in a short time prior to closing your home loan, you may need a letter of explanation or documentation of the reason for the influx of funds.

Seasoning can also mean the amount of time the bank needs for a prior issue to clear, like a bankruptcy or foreclosure.

Essentially, seasoning, in a mortgage, means TIME.

How much time for each item may be determined by your loan type or personal qualifications for your potential new mortgage.

Why do lenders require “seasoning?” They want to ensure that you appear financially stable and to check your creditworthiness for the potential new mortgage.

The bank will require quite a bit of documentation from you, and even when you provide some, they may ask for more, and seasoning details may be part of this needed paperwork.

If you are considering buying a home in Timonium, Towson, and the Greater Baltimore area, please contact me. I could connect you with a local trusted mortgage professional who can help to guide you through seasoning and mortgage options as your buy your new Baltimore home with me!

Also, thank you to Bankrate for a great breakdown of this term.