A recent study shows that there’s one specific indicator for whether a renter will buy their first house within the next two years.
According to government-backed mortgage agency Fannie Mae, a renter’s likelihood of buying a house jumps 23 percent when that renter receives $5,000 in cash from somewhere other than their job.
The cash could be a gift, or a bonus, or a tax refund — it doesn’t matter. It could come from a credit card’s cash-back program; or, from an inheritance from a relative. Even from a crowdfund!
When renters come into cash, they’re more likely to move into homeownership.
If you’re lucky enough to come into cash, or to receive a cash gift for buying a house from relatives or friends, just make sure to document where the cash came from.
Mortgage lenders pay special attention to cash transactions and you’ll want to keep a good trail for your records.
A few “best practices” for receiving cash include:
- Receive your cash via a check or wire — never as actual cash
- Deposit your cash into your bank account prior to using it
- If you receive cash as a gift, the gift giver must date and sign an acceptable Gift Letter that lists the terms of the gift
Not every renter has the good fortune to receive an extra $5,000 from somewhere. However, if you’re among the ones who are lucky, your likelihood of buying a house will jump by a lot.
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