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I am planning on buying a home in NY and i have two part time jobs. one job brings about 3000 in check and one job brings about 3000 in cash. I put both my money away in the bank as I am planning on buying a house. When i go apply for a loan, will it be a problem if i tell them this extra source of income and can i use it to pay for my downpayment or closing costs without problems?

5 Thoughts on I have two part time jobs and one job I get cash only, can i use that cash when buying a home?
  1. Reply
    November 14, 2011 at 7:38 pm

    They will require 2 years worth of steady income with tax returns to back up the income

  2. Reply
    November 14, 2011 at 8:33 pm

    No problem. You did, of course, report the cash income on your tax return and pay tax on it, as you’re legally required to? The lender will expect to see your tax return.

  3. Reply
    November 14, 2011 at 9:25 pm

    when a person hires you for cash that means they don’t want to deal with the government and fica and insurance, etc. so they hire you as an independent contractor and you get to pay taxes on that money at the end of the year. the catch with that cash situation is that as an independent contractor you’d need to have a business license with the state for the job you’re doing, and when you file your taxes you’d need to file a Form “C”. You’d have to be in business for 5 years before that work and profit could be shown on your home application.

    Prior to the 2008 foreclosure fiasco lots of people didn’t prove their income and now they’re losing their homes.

    Before you go to a realtor you’d need to go to your bank, show them a picture of a home you’d like to buy, fill out an application and get them to determine how much they will loan you, usually it’s 80% and you have to come up with the balance of 20%, and you’d have to pay closing costs. If you’re buying a foreclosed home then it could have been stripped and ruined so you’d have to invest money to fix it so it looks ok. Whether it’s a newer or older home you’d still have to look at things that could have gone wrong in the year the home was built. You’d have to pay PITI monthly (principal, interest, taxes, insurance) to your mortgage company so you’d need to know you can afford all that. Actually you don’t start really paying on the home until 10 years have elapsed, what you pay for the first ten years is on the interest, so if you try to sell your home before 15 years or more you’re going to lose money. Ok, so you get approved by the bank then take that letter of how much they will lend you to a realtor and they will help you find a home within or below your budget (what you can afford).

  4. Reply
    November 14, 2011 at 10:14 pm

    You can use the funds you have in the bank as your down payment.
    However, when you apply for a loan, the loan officer will want to see at least your last 2 years tax returns to verify the income you reported. You will also have to produce W2’s and check stubs as well as your bank statements.

    Make sure you are reporting all income, including the cash, and that your employer is reporting your income and paying the appropriate SS taxes.

  5. Reply
    Monte P
    November 14, 2011 at 10:26 pm

    As others have said, if you reported the $ 3000 per pay period cash on your income tax returns, it will likely be looked at as income by your lender.

    If you did not report it, and attempt to use it as a downpayment, your lender is likely going to require some kind of documentation as to where the money came from.

    For example, when my wife and I purchase our last home, we used money from the sale of a property that wasn’t our principal residence. We told the bank we’d be putting a downpayment of $ XX.XX, and that we had sold our principal residence. They looked at the sale paperwork from our principal residence, and immediately asked where the additional money had come from. We had to bring them copies of the sale documents from the other property.

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