Banks are not evil but you’re making yourself look evil by storing piles of cash under your bed.
Please, please, please STOP doing this. I am begging on behalf of all mortgage agents and brokers.
I understand the need to save and seeing piles of cash build up is exciting, but I promise you seeing high-interest savings account grow with interest along with your overall balance building over time is equally exciting. When it comes to buying a house, someone with cash for a down payment is a huge risk and potential deal-breaker. We aren’t asking for your bank statements because we want to see how many times you were at the LCBO or ordered take out. So why do I care about where your cash came from?
The Anti Money Laundering and Terrorism Act
Mortgage fraud is a real thing – People use illegitimate funds to buy houses. This is why the paper trail of where your money came from is so important. A bank will not fund your mortgage if they cannot confirm your down payment is from legal means. Put yourself in my shoes or the bank’s shoes, how are you going to document and prove that the cash under your bed is yours from savings and not from selling something you shouldn’t be selling or any other illegal activity.
So what should you do instead?
- Check out a few high-interest savings account.
- I personally use EQ Bank and have had no issues with them. Feel free to check them out, but please do your own research and make your own decisions on which bank you use.
- If you use this referral link, we might both benefit from a referral bonus https://join.eqbank.ca?code=MICHELLE4578
- Create a separate account within a bank you already use and label it “House Fund”
- You can build up your down payment and after you purchase your home, I recommend you continue to save towards repairs/renovations you may want to complete
- Put it in an investment account
- Depending on your skills and knowledge you may want to use a managed account or manage it yourself.
I am a firm believer in having my money work for me. Money under a mattress is not earning you anything. Find a way to make your money work for you, within your risk tolerance.
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