When applying for a mortgage, the banks want to know where your money is coming from. Copies of your bank statements are always necessary in the pre-approval process. Here are some tips for making sure that you are prepared.
- Always provide ALL numbered pages of each bank account statement. For example, ‘Page 1 of 18” may be nothing more than a cover sheet, and “page 8 of 8” may be nothing but a blank page or advertisement. Unfortunately, underwriters don’t know that unless they can see them.
- Any deposit that’s not clearly identifiable as being from an employer can be subject to scrutiny. As a result, borrowers may be asked to provide documentation to identify the source and purpose of these funds. A letter of Explanation (LOE) can always assist as well.
- Cash- If currency and checks are mixed together, this will be hard to document. A best practice is to make cash deposits that can be clearly documented via the source of the funds. LOEs always help.
- A transfer is treated the same way. If it’s from the borrower via another account, that statement will be required, and all the same rules will apply.