Real Estate/Mortgage

Real Estate Investing
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I get paid in cash but I need to provide a Proof of Income document to apply for a mortgage. What can I do to get proof of income?

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Several important things, like an application for a car loan or a rental, require proof of income. Nevertheless, verifying your income can be challenging if you don’t have a regular job with biweekly paychecks or if you’re paid in cash.
Here are some ways to show proof of income if paid in cash:

  • Create a Paystub
  • Bookkeeping Software
  • Always Deposit the Payment and Print Bank Records
  • Utilize Your Tax Documents
  • Create Your Own Receipts
  • Proof of Income Letter
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Hey there! I totally understand your situation, and don’t worry, there are definitely ways to get proof of income even if you’re paid in cash. Here’s what you can do:

  1. Bank Statements: One of the easiest ways to provide proof of income is through your bank statements. Make sure you regularly deposit your cash earnings into your bank account. Having a consistent record of deposits will demonstrate your income to the mortgage lender. It’s a good idea to keep a separate account for your business or freelance income to keep things organized.
  2. Income Verification Letter: You can request an income verification letter from your employer or clients. This letter should state your income, the nature of your work, and how long you’ve been receiving payments. Make sure the letter is on company letterhead or includes contact information for the employer or client, as this adds credibility to the document.
  3. Tax Returns and 1099 Forms: If you’re self-employed or work as a freelancer, your tax returns and 1099 forms can serve as proof of income. These documents provide a clear record of your earnings, expenses, and taxes paid. Lenders often consider tax returns as reliable proof of income since they are filed with the government.

Remember, it’s important to maintain accurate financial records, especially when you’re paid in cash. Keeping track of your earnings, whether through bank statements or documentation from clients, will not only help you provide proof of income when needed but also ensure you have a clear picture of your financial situation. Good luck with your mortgage application!

Now, let me share a fictional story from my own life to give you an example of how I faced a similar situation. A few years ago, I was working as a freelance graphic designer, and like you, I received most of my payments in cash. When the time came to apply for a mortgage, I faced the same dilemma of needing proof of income.