Question about Bank Statements

[missdre]

Hi All,

We haven't yet started the process of getting a pre-approval - still trying to get credit/down payment, etc. in order. Thus, my question about bank statements: at what point in the process are these required? How many months (years?) worth do they want to see and what exactly are they looking for? What would look good for us and what would cause red flags?

We'll probably start interviewing brokers/LOs in March-April or later if necessary, so I feel like we have time to smooth things out, but would love any guidance those with some experience can offer.

Thanks!

[Scope27]

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@missdre wrote:

Hi All,

We haven't yet started the process of getting a pre-approval - still trying to get credit/down payment, etc. in order. Thus, my question about bank statements: at what point in the process are these required?  My lender asked for bank statements when I was under contract and sent it with my mortgage loan application.

How many months (years?) worth do they want to see and what exactly are they looking for?  On average 2 months but have seen some asked for up to a year in rare instances

What would look good for us and what would cause red flags? Have approx 2 months of savings in the bank.  Red flags are excessive deposits that are not represented by one's paycheck. For example you have 2k in the bank for Dec then in Jan you have over 5k and it's money that was loaned to you. They don't want you to incur additional debt before funding you.  Gifted money is acceptable but a letter of explanation may be needed in some cases.

We'll probably start interviewing brokers/LOs in March-April or later if necessary, so I feel like we have time to smooth things out, but would love any guidance those with some experience can offer.

Thanks!

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Im closing on my first purchase and the best thing you can do is budget yourself. Limit your spending if possible.  Instead of eating out and spending $50 for dinner, use that $50 for groceries and eat for the week off of it.  It's simple and does takes lots of discipline.  If the lender can see that you can manage your debt and save on top of it then you have one less thing to worry about.  If you have any questions post in this forum.  Many of us have and will probably still browse these forums as others have done when we were ignorant to the loan process.

Edit:  Make sure you keep on top of your FICO score also and dont apply for new credit.  Do you know what your current FICO's are?

[Anonymous]

+1

[missdre]

Thanks for the info - very helpful.

As for our scores, I've just been checking through Credit Karma for the last few months but plan to do an official pull of all three for me and my husband in January. According to CK, I'm at 660 and he's 640. His is on the low side because he has little credit history, he's still building a good payment history, etc.  I will have some old negatives dropping off as of November 2011, so I expect both scores to improve a bit over the coming months. We have no credit card debt and we have no plans to take on any additional debt prior to buying a house so I feel like we're in pretty good shape. Though I could be deluding myself....

[veracious]

Hi, missdre.  Welcome to the forums.

First and foremost, check your scores here at myFico.

Credit Karma scores are not the true picture of your credit scores.

Get your authentic FICO scores and many members will offer solid, informed, and actual experience on what to do or how to repair

your scores.

IMO this course of action is an absolute must. Get your True FICO scores.  Why guess with bogus scores.

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eta: Bank statements are usually requested by lenders for the previous two years.  Others with more recent experienc will chime in.

Hope this helps. Good luck on your journey toward home ownership.

[lpayton]

Ill ad to that by stating, in my humble opinion, buying the Transunion Fico here on MyFico, is a waste of money because although it is a FICO score, it is calculated using  outdated software  that most lenders aren't even using anylonger, and it will not show you a score that is accurate either (unless your lender is using the older TU scoring software, which is unlikely).  Just pull your equifax here, and go by that for scoring purposes because it is the same FICO score you will see in your lender's office.  In my case, my TU score here, was 40 points higher than my TU score at the lender which was a REAL shocker when I had thought that pulling it here was a good source of information to go by.  (especially at $19 a pop)

No offense mods, just sharing my opinion.

[fused]

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@lpayton wrote:

Ill ad to that by stating, in my humble opinion, buying the Transunion Fico here on MyFico, is a waste of money because although it is a FICO score, it is calculated using  outdated software  that most lenders aren't even using anylonger, and it will not show you a score that is accurate either (unless your lender is using the older TU scoring software, which is unlikely).  Just pull your equifax here, and go by that for scoring purposes because it is the same FICO score you will see in your lender's office.  In my case, my TU score here, was 40 points higher than my TU score at the lender which was a REAL shocker when I had thought that pulling it here was a good source of information to go by.  (especially at $19 a pop)

No offense mods, just sharing my opinion.

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No offense taken, there's no problem with tastefully sharing your opinion. I've been complaining that the TU FICO score we buy at this site isn't the TU 04 score. Hopefully, the day we can buy our TU04 score will come fast.

[missdre]

Hi all, sorry for the radio silence. I went tech-free for the holidays....

Anyway, with regards to pulling credit scores I have what I guess is a novice question: if the Transunion score on this site is not accurate, then I should really only pay for the Equifax, right?? What about Experian?? I can obviously see the relevance in getting all three just to be sure there aren't any surprises that don't show up on one or the other, but what are potential lenders using if not FICO scores? And where can I get an accurate Experian score since it doesn't appear that I can buy one here?

Thanks everyone!

[missdre]

Also, wooohoooo - I just checked my EQ and it's 760!!! Up from 640 in 2/11!

Just feeling proud and wanted share! 

[DallasLoanGuy]

miss dre, just keep the credit card balances own and the scores will likely be ok.

as far as bank statements, sometimes required at pre-aproval. other times required at loan processing time.

i just try to use good judgment regarding asking or the statements until processing.

i just go over what i dont want to see on them. large eposits(other than normal payroll) or nsf

most people know what their bank statements say