Bitcoin Forum

I was talking to my friend who is a very successful mortgage broker in Miami. Has her own company and made it through the market crises just fine with her business still in tact. Let's say you make a good amount of money trading coins, mining, and doing all the typical crypto stuff. How will you be able to show proof of income to a bank in order to get loans for a house?

Is crypto trading a legit form of income as of yet? I believe it is, yet I feel many main stream people still don't understand. I would like some help on how I would be able to explain this to someone in better term.

I am a beginner when it comes to BTC so please go easy on me if this seems like a dumb question.

For the time being, it's not really advisable to utter the word bitcoin within a 5 mile radius of your bank.  Some of them have been known to be hostile towards anything related to Bitcoin and cryptocurrency in general.  In some extreme cases they have even closed the accounts of anyone suspected of using Bitcoin. It's also very rare for banks to approve loans to startup companies dealing with Bitcoin.  I'm not sure if it's simply because they don't understand it well enough yet, or that they're just tied down with bureaucracy and red tape, or because they do understand it and don't like what they see.

Yeah, I know once I uttered the word decentralized, it all went down hill. Which is great for all of us but horrible for them.

I've been in the lending business for over 10 years...

BTC gains would be hard to use as income because it would have to be shown as capital gains.   Capital gains is the hardest form of income to use towards qualifying income on full documentation loans because Underwriting knows that these gains can massively swing from year to year.   

Most underwriters are going off of a 2 year average, but if you are trying to use capital gains as income, you may need to show consistency over a longer period of time than that.   Also if your gains go up from one year to the next by more than 30% then you will have additional issues.

Most often if you are trying to use capital gains you will need to go with a portfolio loan rather than your typical Fannie Mae or Freddie Mac loan...

Generally speaking in order to have something be considered as "income" the lender will need to document that the income is going to continue for at least 3 years. More often then not, this is not possible for trading income.

In order to document previous income you could simply provide your trading records.

Crypto trading, mining, or anything else related to cryptos, isn't really a worthy way to demonstrate proof-of-income.

These can swing year-to-year, more often month to month, and mining will be a steady decline as time increases, unless you buy more equipment to mine with, which may be more detrimental to your income.

I'd say that if you have an actual job, it would help out. And even if crypto cash goes into this, you better have a way to explain that to the banks, as they may think it's coming from... "other places", which could cause issues for you later on.

Tax statements. 

main stream people have already heard about BTC from different media Internet, TV or news papers. They probably don't really understand what BTC is. As time is going, I think more and more people are talking about BTC, they are / will be interested in buying some BTCs. And they will know the advantage of BTC. You just need to use simple words to explain what is BTC. No need to use sophisticated words.

It's a 'legitimate' way to make money as long as you're paying capital gains, but ether your bank will accept it as proof you can pay back a loan is another thing. If you can prove a steady and regular taxed income then they might. And shouldnt thjis be in Legal?

i'd say bitcoins aren't an asset that banks will take seriously at this point for loan consideration, and they certainly don't have the policies in place. when the ETF gets listed, i'd imagine those are regulated securities that you could list as assets for this.

in terms of "income" from trading, tax returns cover it, like any other self employment.