Planning to have a seamless deal in buying your new home? Are you ready to pay in your home's listing price in cash? Before you put out all that cash money you are saving for years, Realtor details how paying your home with cash may not be a good idea after all.
1. It May Trigger False Representation of Money Laundering Activity
Welcoming your real estate agent with a pool of cash may not caught his interest after all, the article notes that this may even lead to your agent becoming "suspicious" and worst is you might be taken as a money launderer.
"Only a cashier's check from a bank will work. 'Cash on hand is unacceptable nowadays. No title company is going to accept (physical) cash as funds at the close,' Alexander said. Even if the money has been stuffed under a mattress, 'the mortgage company is going to have big doubts about where that money came from,' he said, and will treat it as if it was gained illegally," based from the article.
Aside from this reminder, the outlet also shared that even a "pre-approval letter of a lender" may not work positively as well especially if your bank was not able to trace who the main owner of the cash money.
But if you really want to push through settling with your cash money, you may place the money in the bank first for 60 days.
"Large cash deposits must be made at least 60 days before you start the home buying process and at least two months before you even sign a contract, he added, as the bank will only begin its due diligence after the contract is signed."
2. Document Funds From Other Sources
Funds coming in from other sources must documented as well just like if your relatives are planning to deposit some money in your account. "Cash gifts from relatives must be documented too; otherwise, they can be considered an undisclosed loan which could impact your all-important debt to income ratio," added the article.
It is better to deposit your cash money now as early as possible to avoid these unlikely circumstances if you are planning to buy a home.
