Bank Statement Gotcha’s
- Large Deposits – typically over $200
- Deposits From Items Sold
- Cash Deposits
- Gift Moneys
These Deposits will most likely need to be documented and come from the 2 months of bank statements that you will be asked to provide. Keep copies of checks and Bills of Sale for items sold. Gifts may require that a “gift letter” be signed by a relative. The underwriter is really looking to make sure that no new debt has been created to qualify. Being aware of this up front can save a lot of time during the loan process.
- Transfering from Accounts not listed on your Application
- Closing Accounts
- Transfering to Recently Opened Accounts
- Transfering from Joint / Business Accounts
Transfering money from one account to the next is not the cause for caution. The Act of having to track down the money trail with your help of providing proof is where the discomfort comes into play. Make sure to let your loan officer know which accounts you will be using to qualify and come to closing with needed moneys. These statements will be looked at to verify funds have been “seasoned” in your account for at least 60 days. Transfers, especially after verifications have been done, will likely result in underwriting requests for additional documentation from initiating accouts and can possibly cause delays if caught late.
- Non Sufficient Funds
- Automated Transferes from Overdraft Accounts
- Bank Fees
Overdrafts will likely requre a Letter of Explanation (LOE)to the underwriter describing why this should not be a common event. Having Multiple NSF’s occur in a 60 day period may jeopardize your chances of getting a mortgage. Being aware of this up front can save a lot of time and frustration in what will be expected during the loan process.
Many homeowners often make one of the following 2 mistakes when looking for a home mortgage. If you are looking to buy a new home or refinance your existing one, please be sure to avoid these errors to ensure you get the best deal possible.
Error #1 – Buy Something (Apply for Credit)
It is incredibly important that you don’t go out and buy anything new on credit while applying for a mortgage. Buying something new on credit, or even just applying for credit, can be a red flag for lenders because additional payments could affect your ability to qualify and require additional documentation. So, hold off on any new purchases until after you’ve closed on your new mortgage.
Error #2 – Mattress Money (Storing Your Money)
In the mortgage industry, having money that is not visible in a verifiable account is called “Mattress Money.” Having mattress money could cause a delay in financing because typically mattress money cannot be documented to lenders standards—which would mean that the funds were visible on a bank statement for at least 2 months.
This also extends to any out of the ordinary deposits that you might make when you sell something or receive a gift. In either case, be sure to talk to your Strategic Mortgage specialist at Source Mortgage to determine your next step.