So what's so bad about cash?
Mortgage lenders just don't like it, and they'll prove it to you.
let me be a little clearer here. You can make your payments in cash (sometimes), but it won't help you acquire a mortgage, rather it may help you get turned down.
I teach a segment in a Homebuyers Education Class and last Saturday we had a nice (sarcasm) discussion about cash and its role in the mortgage process. You should have seen the snarl on one of the student's face, who realized she was being hit both coming and going.
If you are being paid cash it is not an acceptable source of income, period.
Income must be consistent, and verifiable, and cash doesn't cut it. I'm going to stay away from the right or wrong aspect, but if it doesn't show up on a W2, 1099, and/or tax return
it doesn't count
we no longer have "stated" income programs, so you're just out of luck.
that's just the way it is
So if you want to qualify for a mortgage you will need acceptable, verifiable income, and
CASH doesn't cut it...not acceptable
Source of Funds to Close:
Ever heard of the term "mattress money?"
Well if you put mattress money together with source of funds to close you have a problem, possibly a turn down.
Yes, we are back to acceptable/verifiable sources of funds to close and
Cash doesn't count...it's not acceptable and/or verifiable
and if you've made a cash deposit of any significance into one of your bank accounts, you have a problem.
lenders are being very picky about verifying the source of large/inconsistent deposits (or any deposits) into your accounts. In the old days they used to just back the money out. That could cause problems, if you now had insufficient funds to close. Today, many investors have overlays where they disallow the total account.
that can be a killer
back to my student, who by now is shaking her head and saying, "that's not fair!"
Maybe it is...maybe it isn't...but it is what it is, and in the mortgage process it's hard to deny that
Cash is BAD!