Cute small house

Applying for a mortgage might seem like you’re being put under a microscope. Even those who are in good financial standing may find themselves uneasy about the scrutiny of their mortgage lender.

The silver lining is that this process benefits you, too. Your mortgage lender wants to be sure you aren’t at risk of defaulting on a loan, which would be bad for everyone involved – the lender loses money, and you risk losing your home.

To avoid this scenario, mortgage applicants are asked to provide all sorts of documents that prove they have the money to buy a home. This includes paystubs, tax returns, gift letters and – you guessed it – bank statements.

Why Do I Have to Provide Bank Statements?

Mortgage lenders require you to provide them with recent statements from any account with readily available funds, such as a checking or savings account.

In fact, they’ll likely ask for documentation for any and all accounts that hold monetary assets. Why is this? They want to know that you’ll be able to afford your down payment and make your monthly mortgage payments. So, your lender will look at your assets and see how much cash you have available to you if you were to need it.

Each lender will have its own requirements for how many months’ worth of mortgage payments it  expects borrowers to have saved up (not including the amount you’ll spend on your down payment). Keep this in mind when you’re preparing to start the home buying process.

How Many Statements Do I Need to Provide?

Typically, you’ll need to provide two months of your most recent statements for any account you plan to use to help you qualify. If the account doesn’t send reports on a monthly basis, you’ll use the most recent quarterly statement.

Why do you need multiple statements? Lenders want to be sure that the money in the account belongs to you, and that you haven’t taken out a loan or borrowed money from someone to be able to qualify for the mortgage. If the money has been in the account for a couple months, they assume that it belongs to you, as any loans you took out beyond the 2-month time span will have already shown up on your credit report. If any large, unexplained deposits appear on the bank statements you provide, you’ll need to be able to prove they came from an acceptable source.

It’s all about ensuring you aren’t too risky for the lender to give you a mortgage. If potential borrowers are  trying to make it look like they’re better qualified to handle a mortgage than they actually are, lenders want to know about it.

How Do Lenders Verify Bank Statements?

Different lenders will have their own processes for getting ahold of your documents and verifying them. Some lenders still work with physical, paper documents, while others may allow you to manage them electronically. Once you give them your bank statements, they may follow up with your bank to verify their validity.

With Rocket Mortgage® by Quicken Loans®, you can automatically import income and asset information when you create your account. We integrate with your bank digitally, so there’s no paperwork, saving you time.

Some Things to Keep in Mind

The document collection part of the mortgage process can be kind of daunting if you don’t know what to expect. Here are a few more things you should know as you’re gathering documents for your lender.

  • If you have a family member who wants to help you pay for your new home, keep in mind that the person giving you this awesome gift may have to provide documentation of the transfer of funds, usually with a bank statement or withdrawal and deposit slips.
  • If you apply and take out another loan while in the process of getting your home loan, the mortgage lender will have to take that new loan into account and recalculate how much you qualify for. In other words, avoid getting new loans or credit cards while you’re in the process of getting a mortgage.
  • When applying for a mortgage, it can be helpful to have all the documents you need ready to go, to make sure the process goes as quickly and smoothly as possible.
  • Your lender may do a check on your bank account more than once. This means it’s important that you don’t make any drastic changes to your finances after being approved for a loan.

Have questions about the mortgage process? Let us know in the comments below!

Related Posts

This Post Has 25 Comments

    1. Hi Tiffany:

      We would advise speaking with one of our Home Loan Experts about your specific situation and any potential options you may have at (888) 980-6716.

    1. Hi Donald:

      I’m not sure exactly what you’re looking for, but I see that you’re working with us, so I’m going to have someone reach out and see if we can help.

      Thanks,
      Kevin Graham

  1. If we have overdrafts will it hurt us getting a loan, we are preapproved but now they need documentation to start the loan process.

    1. Hi Mary:

      Depending on the type of loan you’re trying to get, you may be limited to three fees for nonsufficient funds in one month, but that’s not necessarily true for every program. I’m going to recommend you reach out to one of our Home Loan Experts by calling (888) 980-6716.

      Thanks,
      Kevin Graham

  2. My question is why a bank would ask for all your financial information all over again, 5+ years into the loan when we are not trying to refinance, missed any payments or been late on a payment? This is for a loan my family had to take out to cover my mother’s debt after she died, and found out she used our family property/business as collateral, so is not really a mortgage loan. Can you help me please?

    1. Hi Vicki:

      That’s a good question that I don’t really have an answer for. The only thing I can think of is that maybe I would call and make sure someone else didn’t try to take out an application in your name. It doesn’t totally make sense.

      Thanks,
      Kevin Graham

  3. You folks want my password and sign in to electronically access my bank accounts. I am not comfortable with this. With all of the hacking going on how can i be assured my information is safe? I am also not comfortable with providing personal information concerning my bank accounts for the same reason. I have had loans via Quicken since 1996 and I have never been asked for 3 months of bank statement before. Why now?

    1. Hi Ed:

      I understand your security concerns. You should carefully safeguard your information. I do want to clarify something for you. We don’t store your sign in information including your username or password. You sign in and are asked to provide us with an authorization to look at your bank account which we use to help you get your statements imported electronically. We only get what we need. In terms of why you’re being asked to provide three months of bank statements, different loan options have different requirements and regulations we have to follow. Most loan options require us to verify assets with two or three months of bank statements. They exact regulations will vary from loan option to loan option. I hope this helps!

      Thanks,
      Kevin Graham

    1. Depending on the situation and how you want to qualify, you could end up showing both. I’m going to recommend you talk to one of Home Loan Experts about this. You can fill out this form or call 888-728-4702 to get in contact.

  4. I’m curious about what information is needed from bank statements. Does Quicken need to analyze the transaction history on my statements line by line, or do they just use the statements for withdrawal and deposit totals?

    1. There are some deposits that we have to source depending on the size of the deposit. So we do look at individual deposits.

  5. Hello I just have a question I’m Trying to buy a home and they ask for 2 months of statements and I just look at them and I have quite a few over drift don’t understand why when the money was there for the bills and they took longer then inspected to come out so it over drifted my account will that stop me from buying my home

    1. Hi Shakana:

      It may depend on the type of loan you’re applying for. If it’s an FHA or VA loan, it doesn’t count toward the maximum number of times you can have not sufficient funds fees if you have overdraft protection linked to another account they can take the money out of. If it’s not linked to another account, it could count and there may be limits to the number of times a payment can bounce. This doesn’t apply to conventional or jumbo loans. I hope this helps!

      Kevin Graham

  6. If my husband and I took out money from our savings and put it in a protected safe and then redeposited it at a later date would that raise concern as to where all the extra money came from? I took the money out before we were married and re-deposited it under his personal savings and closed my old savings/checking account

    1. Hi Chelsea:

      That’s an excellent question from one of our Home Loan Experts. It may depend on how long the funds are in the account if and when you redeposit them. You can get in touch with one of our experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  7. If I provided bank statements and tax returns for my in depth pre-qualification letter and worksheet, would I still need to present them again if an offer is accepted on a home within a month of this process?

    1. Hi Christina:

      Typically, they won’t have to ask for the same information after only 30 days. I can’t speak for other lenders, but our preapprovals are good for 90 days. They may choose to verify other information, but they would still have your bank statements, tax returns, etc.

      Thanks,
      Kevin Graham

    1. I’m not quite sure what you mean. We can’t provide a loan just to make your bank statement look good. However, if you can provide more information about what you’re looking to accomplish, we can point you in the right direction.

      Thanks,
      Kevin Graham

  8. Hi my in law wants to get me a house he is trying to use his 401k but will they take his income tax returns when he files tax season

    1. Hi Natasha:

      We would need to see his tax returns. However, the best person to get in touch with is one of our Home Loan Experts to see what years we would need based on when he files. You can do that by filling out this form or calling 888-728-4702.

      Thanks,
      Kevin Graham

Leave a Reply

Your email address will not be published. Required fields are marked *