Bank Statement Review

I wanted to start this blog out with questions about the bank statements you have to turn in to your broker.  Over the past 2 months I have had several questions about the reason for the bank statements and more importantly the reason for the review of each deposit that goes into your bank account. 
reviewing bank statements property guidingLet me start by explaining that when applying for a loan, the bank has to make sure the money you are using for your mortgage purchase is your money.  With a Fannie Mae purchase, most lender’s will require that the down payment is your money and is able to be sourced.  Sourced funds is  money in the bank for over 2 months.  There are a few exceptions to this.  With FHA, you can have the down payment “gifted to you by a family member” or with Fannie Mae, you can have the funds “gifted” from a family member with 20% down payment or more.  Also, with Fannie Mae you can borrow against a line of credit if the line is yours and you count the payment of the new monthly debt in your total debt qualification.

Each underwriter will look over the 2 month statement and look for any deposits over 2% of your reported income on your loan application.  If the deposit is over the 2% you will have to source the deposit.  An example of this would be an expense check from your employer.  You will be required to provide a copy of the check and a letter explaining the check.  With these 2 items you allow to use those funds as available funds to go toward your mortgage.  Another reason for the review is because the underwriter wants to make sure there aren’t any NSF (non sufficient funds) on the statement.  The purpose of the bank statement, besides the money to close, is money management.  The underwriter/broker will want to make sure you can budget your finances appropriately for the months in review.

Finally, the bank statement can also confirm rent for a few months, this allows the underwriter to see what you have paid over the last few months and how you have done financially.  I understand the frustration of all the questions over the bank statement when you are in underwriting.  Please know there is a reason for the questions and I hope that the few examples provided above can help clarify the reason for these questions/conditions on your loan approval.  If you have any questions about mortgages please feel free to call me, Kara Holleran- license #300761 at  239-246-6000.

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Posted on February 25, 2013, in Finance and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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