Providing your lender with bank statements is just one of the many requirements when applying for a mortgage, which is a major step. The standard answer is two months’ worth of bank statements, but there are some exceptions. So how many bank statements do you really need?
Here’s a breakdown of how many bank statements you’ll need for different types of loans:
- Conventional loans: Two months’ worth of bank statements are typically required.
- FHA loans: Two months’ worth of bank statements are typically required. However, if you’re using a gift to help with your down payment, you’ll need to provide three months’ worth of bank statements for the donor as well.
- VA loans: Two months’ worth of bank statements are typically required.
- USDA loans: Two months’ worth of bank statements are typically required.
- Bank statement loans: If you’re getting a bank statement loan, you’ll need to provide 12-24 months’ worth of bank statements.
What do lenders look for on bank statements?
When your lender reviews your bank statements they’re looking for a few key things:
- Proof of income: They want to see that you have a steady income and that you can afford the mortgage payments.
- Evidence of savings: They want to see that you have enough money saved up for the down payment and closing costs.
- No red flags: They’re looking for any signs of financial instability, such as overdrafts, large unexplained deposits, or regular payments to an individual or non-disclosed credit account.
Tips for preparing your bank statements:
- Make sure they’re up-to-date: Your lender will want to see your most recent bank statements.
- Redact any sensitive information: You don’t need to provide your lender with your entire bank statement. You can redact any sensitive information, such as your account number or Social Security number.
- Explain any large deposits: If you have any large deposits on your bank statements, be prepared to explain where the money came from.
- Double-check your statements before submitting them: Make sure there are no errors or omissions.
What if I don’t have two months’ worth of bank statements?
You have a few options if you don’t have two months’ worth of bank statements:
- Ask your bank for older statements: Some banks will be able to provide you with older statements, even if they’re not online.
- Use alternative documentation: If you can’t get older bank statements, you may be able to use alternative documentation to prove your income and assets, such as pay stubs, tax returns, or a letter from your employer.
- Talk to your lender: If you’re having trouble getting the required documentation, talk to your lender. They may be able to work with you to find a solution.
Here are some additional things to keep in mind:
- The number of bank statements you need may vary depending on the lender. It’s always best to check with your lender to be sure.
- You may need to provide additional documentation if you’re self-employed.
- It’s important to be honest and upfront with your lender about your financial situation.
Getting a mortgage can be a complex process, but by being prepared and organized, you can make it go smoothly.
Regular payments, irregular activities
Monthly payments on bank statements that don’t match a credit account that you disclosed on your mortgage application are another item to be wary of.
Typically, your credit report will pull in your credit cards, auto loans, student loans, and other debt accounts. But some creditors don’t report to the major credit bureaus, such as Equifax or Experian.
For example, the debt details associated with a private, personal, or business loan obtained from an individual rather than a financial institution might not show up on your credit report.
But your bank statement’s automatic $300 monthly payment will probably notify the lender that you have a credit account that isn’t disclosed.
What do mortgage lenders look for on bank statements?
Lenders review your bank statements when you apply for a mortgage in order to confirm that you have the funds available for the down payment, closing costs, and ongoing mortgage payments. And the more straightforward your application file, the more likely you are to be approved. Even if unintentionally, you certainly don’t want to raise any red flags.
Read on to learn how you can avoid common underwriting pitfalls and optimize your chances of mortgage approval.
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Why do mortgage lenders need to see your bank statements? | Mortgages Explained
FAQ
How many months of bank statements do I need for a mortgage?
Do mortgage lenders need all bank statements?
Does FHA require 2 months bank statements?
Do I have to disclose all bank accounts to mortgage lender?
How many bank statements do I need for a mortgage?
Keep this in mind when you’re preparing to start the home buying process. How Many Months Of Bank Statements For A Mortgage Do I Need? Typically, you’ll need to provide 2 months’ worth of your most recent bank statements associated with any account you plan to use for loan approval purposes.
How many bank statements do I need for loan approval?
Typically, you’ll need to provide 2 months’ worth of your most recent bank statements associated with any account you plan to use for loan approval purposes. If the account doesn’t send monthly reports, you’ll use the most recent quarterly statement.
How far back do Mortgage Lenders look at bank statements?
Most mortgage lenders typically require 2 or 3 months’ worth of bank statements for loan approval. If your bank doesn’t send monthly statements, you may be able to submit a quarterly statement.
Do Mortgage Lenders need bank statements?
Mortgage lenders need bank statements to ensure you can afford the down payment, closing costs and your monthly mortgage payment. Lenders use all types of documents to verify the amount you have saved and the source of that money. This includes pay stubs, gift letters, tax returns, and bank statements.