Using off book funds to close home purchase??

Question

I am closing soon on an investment property using conventional financing and 25% down.

My question is:

Is it ok if, at closing, I wire funds from another of my personal checking accounts that was not reviewed as part of my current underwriting?

The money would be coming from a separate personal account which would contain recently transferred rental income ( Meaning NOT seasoned for 2 months) from my pass through LLC business account.

This would keep my  “Seasoned” money in my account for the next purchase which I aim to start in the next few weeks. Anyone done this before? Any advice against it?

Thanks in advance!!

Frank Chin · Answer

@Garrett M.

No, you should have issues.

I bought a rental once and the bank asked how I'll pay for the down payment. I had a $200K HELOC, free and clear, and told them $20K will be from the HELOC. They said no, the $20K must be seasoned funds for at least 6 months. My wife at the time manage her mom's accounts and they had a six joint figure money market fund for over ten years. Lender was OK with it when I sent it in as proof of seasoned funds.

I took a check drawn on the HELOC account to the closing and they accepted it as payment. I was going to take money out from the money market funds for the closing and replace it with funds from the HELOC, but was told it's not necessary. From what I experienced, all they want to see is you have the funds at the approval stage. How you juggle your funds for the closing is entirely up to you, at least the closings I've been to.

Stephanie P. · Answer

The money has to be sourced seasoned for 60 days.  If you have a large deposit into the "seasoned" account, that money will need to be sourced and seasoned.