Why You Need To Use Checks (NEVER Cash!) To Pay Your Rent

This is something that keeps coming up as a PROBLEM for first time buyers:  Do you rent from a family member, or a friend?  Do you pay rent in cash every month because your landlord doesn’t want to report it to their taxes?


If so, without knowing it, you are possibly creating a BIG problem for future loan approval.  Most underwriters (these are the people who approve loans at the banks that the lenders send all of your documents to) are required to see PROOF of the last 12 months resident payments before they can approve a loan.


First, talk to a lender for advice!!!  I know some great ones, ask me for a referral if you want to talk to get some advice. They do not charge to guide buyers.

Write a check every month for the SAME amount. If you don’t have a checkbook, get one. You will need checks when buying a house for certain things, it’s time.

Have a lease agreement (contract).  If they won’t take anything but cash ask if you can do a bank transfer every month straight to their account so you have a paper trail or pay with money order every month and save the carbon copy.

Last resort is to cash a check every month in the SAME amount, write rent at the bottom corner of the check and pay the rent in cash. But that may not be enough for some underwriters.

Very last resort, move to somewhere that will allow you to pay in check but be sure to talk to a lender before you make a drastic move like that to get the best advice.

I am not a lender and am just passing on info that has been an issue for other first time buyers. Hopefully, this will help you or someone you know from being put on hold for a year when they try to get a loan.