Fifty-three percent of consumers recently surveyed say they keep at least some cash at home in a secret location, according to a 2015 financial survey by American Express.
But when you’re closing on a home, all that stashed cash tucked away could hamper buyers who try to bring it to the settlement table.
Scott Alexander, operations manager for Assurance Financial, says that lack of verification of income or assets is one of the biggest culprits for sales contracts falling through. A mortgage pre approval letter won’t help either, Alexander says.
A cashier’s check from a bank is the only thing that will suffice on closing day.
“Cash on hand is unacceptable nowadays. No title company is going to accept cash as funds at the close,” Alexander says. 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,” and may treat it like if it was taken illegally.
With fears of money-laundering in real estate deals growing, home buyers who bring any cash to closing could make real estate professionals suspicious and prompt them to file a Suspicious Activity.
So who knew cash could ever be a bad thing? When a buyer is getting a loan, money needs to be verified. Where did it come from….family? The lender needs to verify that funds have been in your your account for 60 days to 90 days (2 bank statements)…that is called seasoning. And if you fill your trunk with cash and show up at the title office…well that actually suspicious!