Mattress Money Can Cause Problems If Not Sourced Properly
Many people keep “mattress money” at home on hand for various purposes – according an American Express survey 53% of us keep some cash in a secret location at home. When you are applying for a mortgage that is where that money will most likely have to stay. Unexpected cash deposits that are inconsistent with your banking history will be under an underwriter’s magnifying glass during the approval process. Cash deposits are one of the biggest problems borrowers face when trying to secure a mortgages today. They can derail your mortgage application very quickly.
Why is that?
The lack of the a borrower’s ability to verify the source of unexpected cash deposit raises red flags with all lenders. All money must be properly “sourced” and verified in order to be used for the purchase of a home. The lender may question whether the money has been borrowed or if even it has been obtained from illegal sources. Lenders must adhere to strict government regulations aimed at preventing money laundering via real estate purchases.
If you are lucky enough to have cash on hand that is stashed away under your mattress there is a simple solution to make it eligible to be used when purchasing a home. Deposit that money far in advance of the start of your home search – 60 days to 90 days out. This is know a “seasoning”. The depositing of money that may or may not have a viable explanation of it’s source will not be questioned if it has been in your account for that length of time.
Mortgage underwriters leave no financial stones unturned these days, but as long as they are turned over properly by making sure all monies are documented properly you can make sure the process goes as smoothly as possible.
Wallingford PA Real Estate – Wallingford, PA 19086
