How Should I Be Paying My Rent?
One area that can be a big help to your clients getting approved is paying their rent in a way that is document-able. For example: if your client has a Credit Score under 580 and is applying for an FHA loan having 12 months, documenting their rent being paid on time is a must. Also, if you have a client with a Credit Score between 580-640, it is also a must to have 12 months proof of rent or housing expense being paid. Cash is not an acceptable form of documentation because it can’t be documented. You may say, “But I’ll have my landlord write out a receipt”. The issue is that there is no way to prove that the money you gave the landlord was your own money.
If you don’t have checks I would suggest one of the following:
1. Have your bank give you a cashier check from the funds in your account each month made out to your landlord.
2. Pull out the exact amount of cash for rent and purchase a money order the same day for the exact same amount of cash you pulled out. Whichever strategy you use, don’t change it. Keep it consistent. Don’t miss a month of rent or paying cash one month. This could make or break your qualifying for a loan.
I recommend good ole’ fashioned checks!
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