“Mattress Money” and Mortgages

Heard of ‘mattress money’? It’s cash saved without a paper trail, from selling a car or getting a gift. But in real estate, how you save matters.

The money could come from selling a car, a small inheritance, or an outright gift. One might assume that cash is cash, but when it comes to real estate transactions, it’s important to understand that the way you save your money is nearly as important as having it in the first place.

Show me the Money!

Lenders check your funds for a home loan, so proving you can cover costs is crucial. They look at recent bank statements, and a $5,000 deficit can’t be fixed instantly. Lenders must verify the source of funds to prevent illegal activities.

stashed under mattress Money

By Law Lenders must verify the source.

Lenders must verify where your funds come from to prevent illegal activities. If you have cash at home for real estate, transfer it to your bank beforehand. This ‘seasoning’ process, having the funds in your account for a few months, avoids questions about their source. Typically, funds should be ‘sourced and seasoned’ for at least 60 days or two bank statement cycles.