Home Buyers Cash Deposits Delay Closings

Home Buyers Cash Deposits

Home buyers who make  cash deposits to their checking accounts that don’t come from payroll checks or income tax refunds during the processing of a mortgage likely will face delays in closing, lending experts warn. That’s because lenders are required to investigate possible suspicious activity for cash deposits that are not documented or cannot be explained, slowing down the process.                                           cash deposits

Scott Sheldon, a senior loan officer with Sonoma County Mortgages, told Credit.com only money that can be adequately “sourced” can be used in the mortgage transaction.

“If you are self-employed and show cash deposits, that’s OK — so long as you claim those monies as income on your tax return and you ‘show’ income from a filing standpoint,” Sheldon says.

For example, if borrowers receive money from parents or family members, they will need to document and explain that deposited check to lenders. Sheldon says that buyers may want to avoid making deposits that will need to be explained at least 60 days prior to closing.

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Source: Credit.com 11/18/2013

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