How Can You Pay Your Cash To Close?
There are a few ways that you can pay your cash to close. More secure forms of payment include cashier’s checks, certified checks and wire transfers. Credit cards, debit cards and personal checks might be accepted, but aren’t recommended.
Cashier’s Check
A cashier’s check is certified by your bank. The bank initially uses its own money to pay for your charge. After the lender cashes your check, the bank withdraws the money from your account. Cashier’s checks include security features like signatures and watermarks that make them hard to counterfeit. You can get a cashier’s check by request at your local bank or credit union. Most lenders prefer these over certified checks.
Certified Check
A certified check tells the lender you have enough money in your account to cover the cost. When you request a certified check from your local bank or credit union, they’ll make sure you have all the necessary funds in your account and will sign on your check. Finally, the bank locks the amount in your account until the lender cashes the check.
Wire Transfer
Wire transfers allow you to electronically send money to your lender before closing. You can ask your bank to do a wire transfer in person, over the phone or online. A wire transfer is a great option if you can’t make it to the bank in person before closing.
Most banks use a service called Society for Worldwide Interbank Financial Telecommunication (SWIFT) to complete wire transfers. Ask your mortgage lender for their SWIFT address so you know where to send your funds.
Keep in mind that wire transfers are not immediate, and it may take a few days for your lender to receive the funds. Make sure you double-check the address before you send the money to your mortgage lender. Wire transfers are not reversible.
Cash
Though your lender may accept actual cash during your closing, it’s not a recommended payment method. Using paper money to pay for your closing may set off questions about where the money came from. Some title companies and mortgage providers have banned cash payments during closing.
Credit Or Debit Card
Your lender needs to know you have the money ready for closing costs in your account before they approve your loan. Credit cards allow you to borrow money from creditors, so they’re risky for lenders. Credit card companies also block large and unusual charges based on your spending habits, so your closing costs will almost always be automatically blocked even if you could use a debit card.
Your lender may allow the use of a secured credit card, which is a type of credit card that requires a cash deposit as collateral. Be sure to contact your lender to see if they accept secured cards at closing.
Personal Check
Lenders will almost always require you to use a certified or cashier’s check instead of a personal check to cover your closing costs (or a wire transfer).