topic Do you need a traditional bank account to get a mortgage loan? in Mortgage Loans

Do you need a traditional bank account to get a mortgage loan?

Anonymous — Mon, 23 Feb 2015 04:46:09 GMT

I have a traditional savings account I barley use but do all my banking and direct deposits through a debit card system through greendot. It tracks all transactions like a traditional bank account, provides statements, and has bill pay options along with receiving direct deposits from my job. I plan on purchasing a home in 3-6 months and wondering do you need a traditional bank account or will something like this work. Any input will be helpful!

Re: Do you need a traditional bank account to get a mortgage loan?

skigirl916 — Mon, 23 Feb 2015 07:17:23 GMT

I've never heard of such a system. I suspect lenders would be suspect as well.

Re: Do you need a traditional bank account to get a mortgage loan?

mynameainttracy — Mon, 23 Feb 2015 12:45:51 GMT

A loan professional will have to chime in on this. On one hand you would think "why not" but then again..."who knows."

In our loan process they have only ever asked for the past 2 months of statements. If the OP opened an account now it wouldn't take long for it to be a non-issue.

Re: Do you need a traditional bank account to get a mortgage loan?

StartingOver10 — Mon, 23 Feb 2015 12:58:04 GMT

I would think that the u/w would require a bank account to approve the mortgage, JMO. Wouldn't it raise red flags if you don't have a checking account and all you use is Green Dot? IDK, maybe Shane or Dallas can jump in with the answer.

Re: Do you need a traditional bank account to get a mortgage loan?

Anonymous — Mon, 23 Feb 2015 13:33:49 GMT

Ok, thanks! The greendot actually works just like a bank account without all the hassle and I have a traditional savings account. Thanks for all the replies I will open a traditional checking account to be on the safe side!

Re: Do you need a traditional bank account to get a mortgage loan?

frugalQ — Mon, 23 Feb 2015 14:58:16 GMT

why not just use your existing savings account? have your pay checks deposited there...and transfer funds from your savings to greendot? make sure to check to see how many transfers you are allowed each month before they start charging.

Re: Do you need a traditional bank account to get a mortgage loan?

Lemmus — Mon, 23 Feb 2015 15:01:47 GMT

...you don't "have" to have a traditional checking account as long as you have a bank savings account that has seasoned money in it adequate to cover the dp, closing and reserves that your lender requires.

...while a non-traditional "checking" like greendot works for you it will likely draw extra scrutiny from the uw ...be prepared for it

......and while opening a traditional checking account isn't a bad idea, watch the monthly charges and fees ...and don't expect a recently opened checking account to raise fewer red flags than a longstanding greendot account ...either way its not what uws are comfortable with and thus will question ...hth

Re: Do you need a traditional bank account to get a mortgage loan?

frugalQ — Mon, 23 Feb 2015 15:18:50 GMT

if OP uses his savings account to store his seasoned funds and has pay check direct deposited there, why would he need to even disclose the greendot account? we have multiple accounts and only disclosed the accounts which we are using for closing/reserve purposes.

Re: Do you need a traditional bank account to get a mortgage loan?

Anonymous — Mon, 23 Feb 2015 15:32:17 GMT

I've had my savings account for a long time and it seems to be a good idea to switch my direct deposit there for some time and deposit my down payment in my savings and let it season and use this account til after I close. I'm not looking to finance until July but I want to make sure I have all my ducks in a row. Thank You all for the replies!

Re: Do you need a traditional bank account to get a mortgage loan?

Lemmus — Mon, 23 Feb 2015 15:38:04 GMT

@frugalQ wrote:
if OP uses his savings account to store his seasoned funds and has pay check direct deposited there, why would he need to even disclose the greendot account? we have multiple accounts and only disclosed the accounts which we are using for closing/reserve purposes.

...yes and no ...every lender I've dealt with has asked for all of my bank account statements ...in my case I needed to disclose all of them to qualify ...the lender uws want to see where your money is coming from and what your spending habits are ...in addition to you having the seasoned money available.

...I'd think in the ops case he'd need to disclose the greendot account in order to show where his savings came from ...he stated his direct deposits go to his greendot account ...ergo, he will have to disclose it even if his seasoned money is now in his savings account

...my point is that I don't think opening a traditional checking account at this point is necessarily a good move on the op's part ...nor a bad one ...it depends

...my bank has free checking for direct deposits over $500 a month ...and free savings if I auto-transfer at least $500 a month to it ...so greendot is not an attractive option in my case ...but it may be in the op's case for reasons that we don't know

Re: Do you need a traditional bank account to get a mortgage loan?

frugalQ — Mon, 23 Feb 2015 16:00:15 GMT

shane and dallas will have to weigh in. we had this discussion on another thread, and it ended with you don't have to disclose all of your assets.....just your financial obligations.

i have traditional bank accounts, but very few debits happen out of them. I run all of my everyday spending and 90% of my bills through my credit cards and pay the balance off before the statement cuts as a way to maximize cash back/points on credit cards. I've been through underwriting, and they did not ask to provide copies of my credit card statements to view my spending habits...and they see fairly large credit card payments deducted from account.