Cash deposits are a whole other level of stress, from what I’ve heard. I always wonder—if you sell something on Facebook Marketplace and deposit the cash, do you have to explain that too? Or is it only “suspicious” if it’s over a certain amount? The rules seem to change depending on who you talk to...
I always wonder—if you sell something on Facebook Marketplace and deposit the cash, do you have to explain that too? Or is it only “suspicious” if it’s over a certain amount?
From my experience refinancing, lenders want a paper trail for any cash deposit, no matter the amount. Even $100 from selling an old chair can trigger questions. It’s less about the amount and more about proving it’s not undisclosed income. Super annoying, but I get why they’re strict. I started keeping screenshots of sales just in case.
Title: Why Is Getting a Mortgage So Hard When You're Self-Employed?
Yeah, it’s wild how picky they get. I once had to explain a $60 Venmo deposit from selling an old bike—felt like I was being interrogated for running a secret business or something. I get that they want to make sure you’re not hiding income, but it does feel a little over the top sometimes. Honestly, I’ve started just leaving cash sales out of my bank altogether to avoid the hassle. Not sure if that’s the “right” way, but it saves me a headache.
- Totally get the frustration.
- I’ve noticed lenders are hyper-focused on “paper trails” for every cent, which feels extreme for small stuff like a bike sale.
- Leaving cash out might make things easier short-term, but I’ve heard it can actually backfire if the bank thinks you’re underreporting income.
- From what I’ve read, they want to see consistent, documented deposits—makes their job easier but ours harder.
- I just started keeping a spreadsheet with explanations for random deposits. Not fun, but it saved me a ton of back-and-forth.
- Honestly, the whole process feels designed for people with W2s, not freelancers or side hustlers...
It’s wild how much scrutiny they put on every deposit, even the tiny ones. I ran into this last year when I was applying for a mortgage—sold some old camera gear and got a couple hundred bucks, deposited it, and suddenly my lender wanted a full explanation, proof of sale, screenshots of the listing, the whole nine yards. Felt like overkill for something so minor.
I get why they’re strict, but it does feel like the system isn’t built for people who don’t have a regular paycheck. I’ve been self-employed for years, and honestly, the paperwork is just relentless. I started keeping a folder with receipts and notes for every odd deposit, just in case. It’s tedious, but it saved me from scrambling when the underwriter started asking questions.
One thing I’d caution against is leaving cash out or trying to “simplify” your finances by not depositing side income. It might seem easier, but if they spot gaps or inconsistencies, it can actually make things harder. I had a friend who tried that route and ended up with more headaches—lenders flagged his account for “unexplained income patterns,” which delayed everything.
It’s frustrating, but I guess the safest bet is to over-document rather than under-document. Not fun, but at least you’re covered if they start digging. The process definitely favors people with W2s... sometimes I wonder if they’ve ever actually talked to a freelancer before designing these rules.
