topic Re: Two Direct Deposits/Self Employment Problem in Mortgage Loans

Two Direct Deposits/Self Employment Problem

scmami — Mon, 09 Jul 2012 15:24:51 GMT

Hey all... I'm still prepping for the mortgage process and have a bank statement question. Hubby and I have 3 checking accounts total: One for each of our direct deposits (his go to a CU account he's had forever). And two with BofA. My DD goes into a BofA account with my name only. And the third account is for him to deposit checks/cash from various Security "side jobs" he does. So my questions are:
1) Should we consolidate at least the two DD accounts? For bank statement/underwriting purposes?
2) Will his income from his sporadic side jobs be counted in our monthly income? We claim any income reported on 1099s on our taxes, but not anymore cash... It's kinda under the table. Sometimes this income is only $150 a month, sometimes it's $1000 a month. We will not need it for DTI; we are both salaried and will be well under PITI and DTI limits.
3) If the answer to #2 is no, will we need to show this accounts statements?

Re: Two Direct Deposits/Self Employment Problem

webhopper — Mon, 09 Jul 2012 15:51:05 GMT

@scmami wrote:
Hey all... I'm still prepping for the mortgage process and have a bank statement question. Hubby and I have 3 checking accounts total: One for each of our direct deposits (his go to a CU account he's had forever). And two with BofA. My DD goes into a BofA account with my name only. And the third account is for him to deposit checks/cash from various Security "side jobs" he does. So my questions are:
1) Should we consolidate at least the two DD accounts? For bank statement/underwriting purposes? It may be helpful but not necessary... Do not let him deposit anymore of this cash from his side jobs
2) Will his income from his sporadic side jobs be counted in our monthly income? Not likely We claim any income reported on 1099s on our taxes, but not anymore cash... It's kinda under the table. Sometimes this income is only $150 a month, sometimes it's $1000 a month. We will not need it for DTI; we are both salaried and will be well under PITI and DTI limits. If its not reported on your 1040, then it doesn't exist in the eyes of the lender, furthermore, I believe that this is in violation of IRS rules. You may consider filing an amendment and paying taxes on this money, consult your tax professional, I"m not a tax pro, so my comments here are merely an opinion....
3) If the answer to #2 is no, will we need to show this accounts statements? You should ask your lender.

Re: Two Direct Deposits/Self Employment Problem

scmami — Mon, 09 Jul 2012 21:06:42 GMT

Thanks... I'll make sure the cash deposits are sourced. I read a few threads where people only had to show statements show DP funds and/or accounts with direct deposits. I will ask my lender/LO but it's not quite app time. Just trying to get all my ducks in a row!

Re: Two Direct Deposits/Self Employment Problem

IOBA — Tue, 10 Jul 2012 08:04:29 GMT

scmami - I just closed last month on a house. I have multiple checking and savings accounts. I only showed the lender two of the accounts -- not all of them. They had no idea, and frankly didn't care, that I had other accounts. The reason I choose to limit their knowledge to two accounts was I didn't want to have to explain small deposits, like birthday money, or loose coins being deposited. The lenders ask so many questions!

You can choose to list all three accounts or only the two that receive direct deposits. Be prepared to explain every single deposit.

Re: Two Direct Deposits/Self Employment Problem

scmami — Tue, 10 Jul 2012 14:56:58 GMT

Thanks! I guess transfers will have to be explained too I'd assume.... Hmmm lots to think about. I've read your posts IOBA... You'd went through a lot!! I would've thought conventional was easier, but I guess not. I'll likely be doing FHA once the scores increase.. Looks like the income is gonna be too high for USDA and we won't qualify for conventional for a few years.

Re: Two Direct Deposits/Self Employment Problem

IOBA — Wed, 11 Jul 2012 16:18:17 GMT

scmami - yeah, the house hunting process and purchasing has been educational and heartbreaking. But in the end, things work out as they should. I have a house with lots of room for improvement, an excellent interest rate, and double the square footage of my studio.

Things work out as they should, but not always as we want.

As for bank statements, limit them to the two banks that have direct deposits. You know they will ask for 2-3 months worth of statements, so consider that when making transfers, deposits, and withdrawals.