“YES, You have to Source Large CASH Deposits”
Anyone in the mortgage business will cringe when we are told “we deposited $25,000 in cash last week”. Of course I need to ask where this money came from, “it was a gift from my parents”. You can’t be doing stuff like this as it creates all kinds of problems, including Big Brother is watching.
Sure, we know that cash deposits are done all the time, there are all kinds of Federal laws and agencies that take notice when large deposits happen. Sure we know that this was done with all go intension, but I can’t do a pre-qualification at this time, as we need money to purchase, but these cash dollars can’t be sourced.
Fortunately, waiting a couple of months isn’t an issue, as they do not have a property in mind. A couple of months from now, they will be handed the pre-qualification.
Would you have done anything differently?
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Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Email: joe@righttracfg.com
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Good morning Joe. Staying away from the ever seeing eye of the federal government is the right way to go. Once they step foot in your door you have problems.
First thing anyone should be before starting to look for a home is to get in touch with a great lender like Joe Petrowsky - then you know your transaction will go smoothly!
Yes, I can see how this could be an issue. It would have been better to do as a check...for both. Parents can take a tax deduction, too.
Hi Joe. Can't you verify from the parents accounts for the source of the cash?
Good moring Joe. Some things change: others never do. Have a great day.
Good morning, Joe Petrowsky buyers do the damndest things.... and they always do it at the worst time....
I'm not buying anything or looking for a mortgage, just waiting for the day I can deposit $25,000 in cash.....and I don't think it's ever coming Joe.
Good morning Joe,
There are just to many eyes watching for on to make a mistake. Yes you did it correctly.
Make yourself a great day.
I advise my clients to be very complete and clear when speaking to their mortgage rep --- ran into issues this summer on this very topic and closings were held up as a result.
Joe Petrowsky It's a damn shame that the government would like to discontinue cash altogether. But we have to play that game.
Bill Roberts
Hi Joe -- when it comes to down payments, it's not just about showing the money but documenting the source(s) too.
People oftem act first....and think they are doing the very best thing they can to prepare for a home purchase...to find out...they should have asked first.
Hi Joe, Just before moving to Virginia and closing on my house here I sold a piece of jewelry. I called my mortgage broker and asked and she told me not to deposit more than $500.00 at a time. She told me it was good that I asked.
Aren't those bags of cash fun, Joe. I once had one with a suitcase full of the dollars...I decided not to do business with him.
It is good reading for prospective home buyers. Many make mistakes with bank deposits.
Hi Joe - I have heard this is a problem. Others have called it seasoned money.
In this day and age, no doubt Joe. I have had issues like this with clients where the lender called me about a red flag.
Joe,
You make a good point, and Big Brother does not like this kind of activity. A
I had a client in the nail business that took in lots of cash. He intended to put down $20,000 and had to deposit it into a bank acount over a few weeks time then wait for the money to season. It all worked out but he just didn't understand why it mattered. It was his money that he earned. No amount of explaining could get him straight. Time passed and he closed. I am glad he had to time to wait too.
Once again, proof positive why Realtors need to get their clients to work with a professional lender EARLY in the transaction to avoid or overcome this sort of issue. This is why I ask lots of questions when pre-approving my clients.
Joe excellent point what is it six months to season the cash??? What if I just came from a foreign country and have a couple steamer trunk full of money... and I would like to buy that 10 million dollar home? Can you help me ?:)))Endre
Joe, there is really nothing else they can do. Cash may be KING, but not when it comes to applying for a loan.
Joe
Your post is right on point . . . . large cash deposits need to be sourced.
Good luck and success.
Lou Ludwig
How long before desposits are seasoned and don't have to be sourced?
Hi Joe Petrowsky
I had a client who ran a tax business and took in a lot of cash. The lender was doing a loan for $100K and she was putting down $350K cash but they were so upset when she kept depositing cash. The one account was her business account but the major bank almost refused the loan as they felt she was hiding money or maybe laundering it. How could I tell her not to make her cash and check deposits on a daily business. Cash is King but not for banks!
It's always an issue when the lumpy mattress is raided and they want to make the lumps the down payment
"See you in 3 months!"