One of the most crucial pieces of information you will submit when applying for a loan are your bank statements.
This is because they give your lender the clearest picture of your financial situation and spending habits, which is needed to ensure you will be able to make a new monthly payment on a home. When submitting account printouts, it’s important to provide documents that contain pertinent information for identity and underwriting purposes. This is essential to the review of the loan process.
These days, the easiest and most common way to submit your bank statements is to simply print them directly off your bank’s online banking platform. If you choose to do this, be sure that the 5 elements listed below are present on every page or click here for a more visual reference!
Make Sure These 5 Things Are Present On All Bank Account Printouts
1. Name & Address
Your full, legal name and verified address should match all other documentation provided in your application.
2. Account Number
At least the last 4 digits of the account number.
3. Account Activity
We require the account activity (transaction history) from the last statement date through the current date.
4. Website URL
URL needs to be included on all pages.
5. Page Numbers
Page numbers should be indicated- please include all pages.
Warning Signs That Stand Out To Lenders On Bank Statements
Mortgage underwriters are trained to spot inconsistencies and any indicators of financial mismanagement. Before submitting bank statements, look them over for yourself and be ready to explain any of the following:
Large Deposits
When a bank statement has large lump sum or sporadic deposits, it can be a red flag to underwriters. Be sure that you can verify the source of these deposits and prove that they are coming from legal, acceptable places.
Overdraft Charges
When evaluating your statements, lenders will typically request the last 2 months of transaction history. If several overdraft charges are present, it can, unfortunately, suggest that someone may be an unreliable borrower.
Monthly Payments To Individuals
Recurring payments to non-banking accounts can confuse lenders and make it look like you’ve taken out loans from family members or have undisclosed credit elsewhere. Ultimately this would change your debt ratio and can affect your loan.
When you are aware of your finances and bank account transactions in the initial phases of your home loan journey, it can make the mortgage process a lot easier and hassle-free. Remember: Underwriters review your accounts once more, just prior to closing. So, be sure to maintain clear and consistent transactions throughout the closing process as well. Contact any of our experienced mortgage loan officers to get started today!