How about you? Do you have cold, hard cash in a drawer, under the bed or behind a box in the closet? Many borrowers do. They either get paid “under the table” and don’t want to deposit the cash in order to avoid paying taxes to the IRS or are scared to put their money into a financial institution. The latter was definitely a concern during The Great Depression, but now that the Federal Government insures accounts up to $250,000, it is much less of a concern.
When applying for a home loan, the problem with this so called “mattress money” is that the lender will not count it toward the reserve requirement or down payment. This is the same with gold and silver. Even though these are valid commodities, lenders will not use them. So what is one with such assets to do?
If it is cash that you have, you will have to put it into a checking or savings account at least three months prior to buying a home in order to have at least two months worth of bank statements to show the lender. As far as commodities, they are difficult to convert and typically aren’t counted as liquid assets in a real estate loan transaction.
If you are unable to open a checking or savings account for any reason, you won’t want to miss my next post! If you can’t wait, call me 661-964-1320 begin_of_the_skype_highlighting end_of_the_skype_highlighting or email email@example.com