Don't Pay Cash For Your Rent!

By
Real Estate Mortgage Broker with Movement Mortgage 770-634-4021 NMLS #206275

Attention would be home buyer, a word of caution.  Don't pay cash for your rent!  Although paying cash for rent may be your landlord's preference, this is going to be an issue when you decide you want to purchase a home. 

If you are renting from an apartment management company or through a property manager, a verification filled out by the property manager will be acceptable supporting documentation for your good payment history.  If you are renting from an individual, you must document the landlord's claim that you have paid your rent on time.  A receipt with a money order might be acceptable, but as the guidelines continue to change there is no guarantee that it will be when you buy.  The best way to do that is with a canceled check. 

Now, there have been some prospective home buyer's that I have talked with lately that told me they don't have a checking account.  This is the first thing to is open a checking account!  You aren't going to make a mortgage payment paying cash.  The earlier you get this set up, the better. 

As part of the underwriting criteria, your last two month's bank statements required.  Not only do you need to provide the bank statements, but the information each line of the bank statement is also reviewed.  Two things to watch for, running the balance down to almost nothing and over draft charges.  The over draft charges, can be the difference between a loan approval and a loan denial. 

If you are looking for other suggestions on what to do before you buy, please give me call.

Posted by

 

If you found this blog valuable, please subscribe by clicking the button to the right.  If you are ready to talk about a mortgage, please click HERE to apply now.

 

Signature 

 

Kathleen Sheehan

Sr. Mortgage Consultant

NMLS #206275
Georgia Residential Mortgage Licensee #25839

1725 Windward Concourse Parkway

Suite 320

Alpharetta, GA  30005

 

770.634.4021 cell

 

 

What to learn more, Google Me!

 

Like what you saw, please SUBSCRIBE to my blog!

 

  

 

Women's Council of Realtors Secretary

 

 

 

 

 

 

The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the leaf to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Groups:
Mortgages
Tags:
paying rent
mortgage
cash payment
rent

Comments 8 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the man to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Ambassador
1,304,662
Jon Zolsky
Selling Daytona paradise for heavenly good prices
Daytona Condo Realty, 386-405-4408

Kathy - yep, this is an excellent advice. It is easy to follow the habit and find out later that it affects your ability to buy anything

August 01, 2011 10:13 PM
Rainer
223,861
Donald Reich
Prudential Centennial

You make a great point. Lenders want proof of what your rent is, and that you pay it on time. You don't have that if you pay cash!

August 01, 2011 10:18 PM
Rainmaker
657,435
Pacita Dimacali
Alameda/Contra Costa Counties CA
Alain Pinel

Kathy

There's another reason why paying with cash may not be a good idea. Having proof of payment (cancelled check) is also proof of tenancy which comes in handy if one lives in a rent-control city.

My sister's roommate had a rent-controlled flat in San Francisco. When my sister started rooming there, she paid her share of the rent directly to the landlord, and not to the roommate. When the roommate left, because my sister was shown as having paid rent, too, she took over the rent-controlled flat. That flat would have cost twice as much to a new renter.

 

August 02, 2011 02:14 AM
Rainmaker
563,794
Kathy Sheehan
Movement Mortgage 770-634-4021

Thank you all for your input.  As underwriting criteria continues to change it is easier to address an issue like this upfront.  I didn't think about it for another rental, since I don't work with renters.

August 02, 2011 09:03 PM
Rainmaker
284,458
Wandanna Melliphant
A Name Real Estate Investors Trust and Recommend
Royal Lepage Credit Valley Real Estate Brokerage

Hi Kathy,
Thanks for sharing.
I totally agree with paying rent from a checking account. Making large payments especially consistently via cash is never a good idea, because there is no paper trail.

August 08, 2011 10:25 AM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the clip to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
563,794

Kathy Sheehan

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the graph to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: