Josh Kyle on Why Cash Isn’t a Good Thing When Buying a Home
Assets are imperative to the mortgage process. For those who don’t know what an asset is, it is anything of value that can be converted into cash. It is essential to identify what your assets are and to document them correctly. Having that information will make the mortgage process easier to navigate for everyone involved.
One of the biggest mistakes you can make during the mortgage process is to deposit large sums of cash into your accounts. Some people think cash is king and that it’s accepted everywhere – that is not the case in the mortgage business. In fact, that is the exact opposite of what we want you to do. We need a documented paper trail for the funds in your accounts, because an underwriter needs to be able to trace the origins of your deposits.
If you have been keeping your nest egg under your mattress, and then you suddenly deposit that cash to make the down payment for your home, that’s going to raise some red flags.
Best course of action for a smooth mortgage transaction is to make sure all the funds in your account are traceable. If a cash deposit is unavoidable, make sure you talk to your loan officer to discuss your options.