The Truth About “Mattress Money” and Mortgage Applications

Money hidden under the carpet

Do you have savings, but they’re not stowed away in a bank, credit union, or another type of financial institution? Then you might want to reconsider that move — especially if buying a home is on your radar.

You see, even with thousands saved, “mattress money” won’t help you much when applying for a mortgage loan. In fact, it may even hurt your chances in the long run.

Let’s dive into why this type of savings can ding your mortgage application and look at some smarter ways to manage your cash before buying a home.

What’s Wrong With Mattress Money?

The biggest issue with mattress money — funds stowed away in some hidden location in your home — is that there’s no paper trail for it. Your lender can’t verify where it came from, when it was saved, or even if it’s indicative of your long-term financial habits and health.

Lenders need to see consistent, regular income and savings in order to know you’re qualified to pay back a loan — and mattress money, by default, just can’t provide that solid proof. This lack of asset verification is one of the top reasons loans fall through.

But in addition to the lack of paper trail, lenders are also regulated and have to be wary of the source of so-called mattress money. Unfortunately, in certain circumstances, the inability to source funds can be due to the fact that the funds were obtained through illegal means — money laundering, as an example.

Can Mattress Money Be Used Toward Other Home Buying Costs?

Mattress money isn’t just bad for your mortgage application; you can’t even use it toward closing costs or your down payment either. In today’s day and age, most title companies won’t accept any sort of cash at the closing table. The only thing they’ll take? A wire transfer from your bank or a bank-issued cashier’s check — all of which require a financial institution as the middleman.

A Better Route to Homeownership

If you know you’ll be buying a home and applying for a mortgage soon, it’s important to put any money you earn (or come into) directly into a checking or savings account with a reputable financial institution.

If you’ve already got mattress money, open a new savings account and deposit the full amount in. You’ll need to let this balance “season” for two to three months in order to prove it’s yours. You should also let your lender know about the stowed-away cash as soon as you start your application process. This will help you avoid any unwanted delays as you get further toward closing.

If possible, you can also start using that mattress money toward bills, utilities, and other costs you have, and put your paychecks and other income straight into the bank. Set up direct deposit if it will make the process easier.

Another pro tip: Lenders will review at least 60 days of bank statements (sometimes more, depending on your loan type), and any big cash deposits will need a thorough paper trail, as well as a written explanation from you, the borrower.

Final Thoughts on Mattress Money

Always remember, mattress money doesn’t just hurt your chances of buying a home; it also poses a risk to you and your household.

What if your home were to catch fire or flood? What if the money was stolen in a burglary? A bank or credit union can offer you peace of mind that your hard-earned cash is safe, secure, and accessible at any time (as well as give you the paper trail your mortgage lender will require).

Worried About Your Mattress Money?

Have mattress money stowed away? Planning to buy a house? Then get in touch with your local Embrace loan officer today. We’ll give you personalized advice on next steps, as well as guide you toward the best loan products and options for your home buying goals. We’re here to help!

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Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at or on Twitter at @AlyJwriter.