Mortgage Moment - Verifying Cash

Michael Holigan: Today we're going to talk about verifying the cash that you need to buy your new house. Now the builder cannot give you any of that money, so they're very tight on this. You want to watch it and see where you got all of your funds. First off, your checking and savings account. They want to see documentation on both accounts. They want to see all of the money for the last three months, make sure no large deposits came in to your account. Next, sale of property. You are allowed to sell property, but there's different ways to look at it. If it's real estate, they want a settlement statement. They want to see how all of the funds moved across. They want to see who got what, how it worked. If it's personal property, say a car, a horse, a motorcycle, whatever, you can't just sell that and not have it appraised. They want an appraiser in that field. Not a real estate appraiser, but someone who's used to that type of item to give them a written value. Now in the past, you may have a $1,000 car and the builder may have given $5,000 for it so you could have used $4,000 of that money to close on your house. That is not allowed. That is loan fraud and you could go to jail for that. So they want it appraised. They want to know how the money worked. Last thing, borrowing against an asset. Can you borrow money against that car to close? Yes you can. But remember, when you take out a loan, that counts against your qualifying ratios, so don't let that knock you out of your payment. Make sure that you can pay back that loan, as well as use that money for your down payment. Sit down with your lender, make sure everything's above board, do it right, you can move into that new house.

Episode 020 1995 - 96 Season

| Wallpapering | Garage Door Problems | Buying New Appliances | Sweat Soldering | Closet Redo | Verifying Cash to Close | LIST |

To order a Video Tape, call 1-800-TO-BUILD and ask for Episode #020.