Seasoning is used in several circumstances with regards to a mortgage loan. In each case it is proof required to show that a period of time is met. The most common seasoning is of assets and for a new appraised value.

Seasoning for new appraised value or seasoning of title is usually a guideline for refinancing and getting cash out of the equity of a home. For example if you buy a home and do extensive repairs to improve the value of the home, you will need to wait at least 6 months to access that new equity in the house. This guideline is often an issue with real estate investors who purchase distressed properties, fix them up and either sell them off or rent them.

Seasoning of assets is a guideline often required for full doc loans. The guideline is usually that any assets being used for the transaction must be seasoned for at least 30 days. This means that any funds being used for the down payment or closing costs or for reserves must be shown in an account for at least 30 days.

If a lender requires seasoning you may be able to circumvent if you have made significant repairs to the property. You may have to prove this by providing receipts or statements from the repair/improvements but then you may be able to access the equity in the home.

Also you have reserve requirements mostly for investment purchases and first time home buyers. This requirement means you may have to have 2-6 months worth of PITI (principle, Interest, taxes and insurance) in an account as back up money. There is usually a seasoning requirement of 60 days on these funds. This means the money will need to be in the account of the borrower for this time period before you can close on the property. Your mortgage broker will know these guidelines in advance to make sure you qualify for the right loan program.

Often times, the seasoning requirement for appraisal values is to deter dishonest appraisers from falsely inflating the value of a home.