A problem with cash?

[Bratbaby]

Hello,

Well, I think I'm under contract! My down payment is in a money market account. The house we love is about 5k over what we'd planned, so some of what we were going to use for closing costs is going to end up in the down payment. The mortgage will be in my name only. My husband has several thousand dollars that he's kept in the safe for emergencies (i think this qualifies) and we want to just deposit it into the money market account. Would he need to write a gift letter? Will there be a problem since the funds have just been sitting in an envelope in our safe? Do funds that are not used as a direct part of the purchase price, but only to cover fees etc associated with the closing, have to be as trackable as, say, the down payment?

I'm not sure I'm wording this clearly, but any advice is much appreciated!

[StartingOver10]

Yes, cash is a problem. You can't just deposit it into your account.

All the funds you need to purchase your home need to be traceable. Contact your LO to discuss the acceptable way to utilize those funds for your purchase.

[Anonymous]

Cash is a problem but if you sold something and wrote up a bill of sale for it that may suffice.  Maybe you have a car in your name and you sell ti to your husband for the money you receive.

[DallasLoanGuy]

---

@Anonymous wrote:

Cash is a problem but if you sold something and wrote up a bill of sale for it that may suffice.  Maybe you have a car in your name and you sell ti to your husband for the money you receive.

---

i think the uw would see thru that and deny the loan for fraud

[DallasLoanGuy]

yes, cash is a problem for conventional.

fha allows it.... but it has to be reasonable.... 

[Bratbaby]

Well, I'll see what the LO says. It's not any kind of "ill-gotten gains," it's just money he was saving primarily to work on his bike. Hopefully she'll have some good ideas!

[Bratbaby]

And we're definitely going FHA. Maybe that'll simplify things!

[Anonymous]

What's most important here is where it came from. If he has documented income, like from an employer, and he gets his paycheck and takes some cash out to sock away, you can prove that. Ex, he gets paid $1000 every two weeks, deposits $700 in the bank and socks away $300 in cash. He can show the difference in deposit from each paycheck from what he deposits to what he socks away. This is even easier if he gets direct deposit and makes withdrawals to put away in the safe. Where does this money come from that he puts away? Is that documented anywhere?

[Anonymous]

You can always use the cash to pay some of your bills, and use your documented income over the next pay period(s) towards the loan. 

[Bratbaby]

True...we may just do that with a lot of it.

Thanks!