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Do lenders judge bank statements?

Regular Contributor

Do lenders judge bank statements?

Hi there. Just saw an old post from someone who mentioned the bank requiring bank statements for a USDA loan, and got me thinking.  Do all lenders ask for bank statements, and if so, what precisely are they looking for?  Do they only want to know how much you have in the bank and verify that you haven't bounced anything, or do they judge your spending pattern?  Do most lenders just want 2 months of statements?  I want to make sure we have everything as "perfect" as possible before applying for a loan!!  Thank you.  Smiley Happy

Message 1 of 10
9 REPLIES
Valued Contributor

Re: Do lenders judge bank statements?

They are all going to require statements.  For the most part they are just looking at the balance, overdrafts, and source of funds. i.e. unexplained deposits.  They are mainly wanting to see your cashflow is coming from work.  From what I've seen they disect your spending patterns.

Message 2 of 10
Established Contributor

Re: Do lenders judge bank statements?


boomhower wrote:

They are all going to require statements.  For the most part they are just looking at the balance, overdrafts, and source of funds. i.e. unexplained deposits.  They are mainly wanting to see your cashflow is coming from work.  From what I've seen they disect your spending patterns.


+1 You're not going to find a lender who will blindly give you a loan with no indication of what type of spender/saver you are and how responsible you are with money.


Starting Score: 760
Current Score: 716 Equifax 754 TU 736 Experian
Goal Score: 760
Message 3 of 10
Regular Contributor

Re: Do lenders judge bank statements?

Thank you all.  I knew they wanted statements, but wasn't exactly sure what they look at beyond whether you have income and/or overdrafts.  What specifically are they looking for - do we need to save a certain percentage of income?  We are probably going to do FHA, as this is our first mortgage and we like the lower down payment requirement.  Is there anything particular we need for that program?  How many months of statements will they want?  Thank you!! 

Message 4 of 10
Regular Contributor

Re: Do lenders judge bank statements?

Oops - meant to ask, do we need a certain percentage of our income in savings, not just a percentage of income!  Smiley Happy

Message 5 of 10
Frequent Contributor

Re: Do lenders judge bank statements?


goodygoody wrote:

Thank you all.  I knew they wanted statements, but wasn't exactly sure what they look at beyond whether you have income and/or overdrafts.  What specifically are they looking for - do we need to save a certain percentage of income?  We are probably going to do FHA, as this is our first mortgage and we like the lower down payment requirement.  Is there anything particular we need for that program?  How many months of statements will they want?  Thank you!! 


For my FHA loan they asked for 12 months of statements for all asset accounts including 401K, etc. They weren't looking for any percentage of income to be saved.  They were mainly looking for any overdraft/NSF and deposits outside of direct deposits.  I had to verify funds of any deposits that were over $200 that were not direct deposited.  If you have any overdrafts/NSF then you have to provide an explanation.  


Starting Score: 639 (Walmart TU)
Current Score: TU 668 EX 649 EQ 657 (All Lender Pull 1-13-2012)
Goal Score: 700 Across the Board (Mortgage Goal Achieved 1/31/2012!)


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Message 6 of 10
Frequent Contributor

Re: Do lenders judge bank statements?


LadyRover wrote:

goodygoody wrote:

Thank you all.  I knew they wanted statements, but wasn't exactly sure what they look at beyond whether you have income and/or overdrafts.  What specifically are they looking for - do we need to save a certain percentage of income?  We are probably going to do FHA, as this is our first mortgage and we like the lower down payment requirement.  Is there anything particular we need for that program?  How many months of statements will they want?  Thank you!! 


For my FHA loan they asked for 12 months of statements for all asset accounts including 401K, etc. They weren't looking for any percentage of income to be saved.  They were mainly looking for any overdraft/NSF and deposits outside of direct deposits.  I had to verify funds of any deposits that were over $200 that were not direct deposited.  If you have any overdrafts/NSF then you have to provide an explanation.  


One more thing...they were also looking for all my cleared payments made to the builder and also my cleared deposits of funds (gifts & 401K loan) to my account for my downpayment.


Starting Score: 639 (Walmart TU)
Current Score: TU 668 EX 649 EQ 657 (All Lender Pull 1-13-2012)
Goal Score: 700 Across the Board (Mortgage Goal Achieved 1/31/2012!)


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Message 7 of 10
New Visitor

Re: Do lenders judge bank statements?

Does anyone know what happens if everything else is fine with your credit and everything but you have overdrafts?  I've been overdrawn a few times in the last 12 months, mainly from being laid off. But fixed everything quickly, and have a more stable job now. Will FHA reject you for overdrafts even if you have down payment, good credit, and no lates on rent or utilities? None of my overdrafts were sent back or anything.

Message 8 of 10
Frequent Contributor

Re: Do lenders judge bank statements?


fairyfeathers wrote:

Does anyone know what happens if everything else is fine with your credit and everything but you have overdrafts?  I've been overdrawn a few times in the last 12 months, mainly from being laid off. But fixed everything quickly, and have a more stable job now. Will FHA reject you for overdrafts even if you have down payment, good credit, and no lates on rent or utilities? None of my overdrafts were sent back or anything.


They will require an explanation letter.  The older the overdraft the better. I don't think they will reject you solely for them unless you are constantly overdrafting every single month.


Starting Score: 639 (Walmart TU)
Current Score: TU 668 EX 649 EQ 657 (All Lender Pull 1-13-2012)
Goal Score: 700 Across the Board (Mortgage Goal Achieved 1/31/2012!)


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Message 9 of 10
New Contributor

Re: Do lenders judge bank statements?

I have a credit line attached to my ING Direct checking account. I have used it from time to time. There are no NSF fees when I use the credit line but I do pay a interest. 

 

Will this be looked upon negatively?

Current Score: EX - 775; EQ - 774; TU - 768 6/06/2012 FAKO
Starting Score: EX - 738; EQ - 740; TU - 750 01/30/2012 FAKO
Approved for USDA Guranteed Mortgage...waiting on the builders now!
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