You are buying a new home, super excited, you have your mortgage preapproval and are ready to go – or are you? One piece that all lenders need to do is verify the money used in your mortgage transaction. We need a 60 day history. That sounds easy, right – just two months of bank statements. Maybe. Maybe not.
Once you have written your purchase agreement, you will need to write an earnest money check. Most lenders will need to verify that the earnest money cleared your account. That may mean we need another bank statement. Maybe we can't wait for another statement – maybe we need a bank printout showing the check cleared. That will also work – but it needs to show the bank name, your name and at least a partial account number. It also needs to show the transaction history back to the last bank statement including daily balances.
Underwriters are looking for large deposits that may be from another source besides your payroll. Maybe you got a gift from your parents – that should be fine, but we need to document that it is a gift and you do not need to pay it back. Did you sell a car or something else? We need to document that you owned the item you sold and what the value was. Underwriters want to make sure there is not a new loan that could affect your ability to make your new mortgage payment.
Do you have automatic deposit or do you deposit your paychecks? If you deposit your paychecks, you will need to send copies of the paystub to your lender to match up with the deposits into your bank account. If you are self employed and make deposits during the month, you will need to document the deposits. Keep copies of what you deposit so you are prepared to give them to your lender.
Cash deposits can't be used – we can't document where the cash came from. They may actually lower your available bank balance so try to avoid cash deposits.
Look at your bank statements and see if there is anything that might trigger a question. If so, talk to your lender about it so they are aware of what is going on. Expect underwriting to go through every page of your bank statement – if that last page is just advertising, we still need it if it's part of the numbered bank statement. If the statement says it's 6 pages, we need 6 pages. If you aren't sure about it, talk to your loan officer. Unfortuantely, bank statements can be one of the first things that get questioned by an underwriter! If you are prepared, it can make your mortgage approval that much easier – and keep an approval as an approval!