How do you deposit money in the bank without causing issues for your home loan underwriting?

Asked by Ganttsrus, Suitland, MD Tue Aug 31, 2010

I sometimes do hair braiding and I get paid like $200 or so per person when I do it...rarely. I have two people that are paying me in the next week or 2 and of course it is a cash transaction. Can I just deposit the $200 or $250 in my bank account without having to worry about the bank asking about those deposits when I am being reviewed/underwriting for a home loan since these amounts are small (under $500) or do I need to do something else. As most will know these type of transactions are always cash in hand.

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11
Dave Griswol…, Agent, Bridgewater, NJ
Tue Aug 31, 2010
Hi Ganttsrus, Whatever your normal bank deposits are just increase them a bit say by 100 one time the next time do 150 then like 90 and even as high as 250 thats not a problem to the best of our knowledge. That should be just fine. When you make deposits that are double your normal amount thats when the banks question it.

all the Very Best
Dave & Lisa
Web Reference:  http://www.urhomerealty.net
1 vote
Ganttsrus, Home Buyer, Suitland, MD
Tue Aug 31, 2010
I agree with you FSBO. Some obviously didn't read my question. I just wanted a "yea go ahead the amounts are not an issue" or a "no don't do it do this...." I obviously want to have those funds to use for the down payment as well and not just store them somewhere. Its like that episode on HGTV my first place where the family did a garage sale to get a few hundred bucks for their downpayment. I thought that was very neat.
0 votes
FSBOsuccess, Home Seller, 28590
Tue Aug 31, 2010
I don't think some of the people answering your question actually read your question or if they did, they sure didn't understand it. I can't see how making those deposits would make a big difference. If you are worried about it, just put it in a lock box and wait until it is over and you have closed.
0 votes
Ganttsrus, Home Buyer, Suitland, MD
Tue Aug 31, 2010
This is NOT part of my income, and it would not be in the thousands...Its literally probably about $800 total....and even that would only be 4 people at $200 over the span of the next 30 days.....
0 votes
Annette Levi…, , New York, NY
Tue Aug 31, 2010
Andrew & Elena, when cash on hand is in the thousands it is always questioned. One should always have some money for emergencies. In New York that could be up to $1,000. After all in a black-out ATM machines do not work.
0 votes
Cheryl Muham…, Agent, Memphis, TN
Tue Aug 31, 2010
Is hair braiding considered as part of your income? If so then just show your sale receipt from each client. If not, they will ask the income to be sourced.
0 votes
Kristen Blan…, Agent, Dracut, MA
Tue Aug 31, 2010
You will need to show proof of where this money came from. I have a buyer right now that took out a few hundred dollars to go away for a couple days. He deposited $200 when he returned since it did not end up getting spent. He actually had to write a letter of explaination for this so, make sure you can prove it. Perhaps writing a receipt and having the person sign it...
Web Reference:  http://www.sellyourden.com
0 votes
ANDREW OLLICK, Agent, NAPLES, FL
Tue Aug 31, 2010
Annette, I do not know a single good lender ( reputable, one with good rates) that accepts cash on hand any more, so I don't think it's an option for her. It's always better to play on the safe side.
Now the idea of paying your bills with that cash is a good one.

Elena Ollick
Amerivest Realty
Faith Home Loans
239-206-4500
eo@oceanhomesrealty.com
skype: napleshomes
http://www.andrewollick.com/realestateblog
0 votes
Annette Levi…, , New York, NY
Tue Aug 31, 2010
I disagree with Andrew and Elena. If you put in the money together, you can always say you had cash on hand for emergencies. But if you put in deposits close together that are not your salary then these days it puts up red flags to all underwriters. Showing them a receipt for hair braiding may make them wonder if you plan on conducting a business from your home.
I personally would use this money to pay bills.
0 votes
Ganttsrus, Home Buyer, Suitland, MD
Tue Aug 31, 2010
Ok that is good to know. I am not in business or anything to do hair. These are simply friends or family members who ask me to do their hair...just a simple thing on a saturday morning or something ya know. But I want that money to be deposited to help with padding my bank and having the funds to close on our home in the next 30 days without having to jump through hoops ya know. Thanks for your help. I will just deposit them 1 day at a time or something.
0 votes
ANDREW OLLICK, Agent, NAPLES, FL
Tue Aug 31, 2010
Such small amounts as 200 and 250 can be simply deposited. Howevere any large deposits should always be sourced.
I would also recomend that you have a signed receipt for every time you do a hairbraiding service.

Elena Ollick
Amerivest Realty
Faith Home Loans
239-206-4500
eo@oceanhomesrealty.com
skype: napleshomes
http://www.andrewollick.com/realestateblog
0 votes
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