“Child Support as Cash”

I was doing a preapproval this morning for a client that was referred by her brother. I was most of the way through the process when she mentioned that her ex-husband pays her child support in cash and has been doing it that way for the last couple of years.

I asked if she deposits the money into her checking account each month, of course she said no. She wasn’t very happy with me, when I told her we couldn’t use the income, because it is paid in cash and can’t be documented. Unfortunately, without this income she will not qualify for the mortgage she was looking to get preapproved for.

All of us in the mortgage business cringe when someone says they receive income of any kind in cash. If the income is needed to qualify, that will be a problem.

All lenders want to be able to trace the money to an account. In this case if the cash funds were deposited into a checking account on a consistent basis, we could have a shot, but if not, it just can’t be used.