Gathering Your Financials
Gathering your financials and sending them to a lender is part of the pre-approval process. You’re lender needs to see two months most recent bank statements. This would be primarily your savings and checking accounts but may also include stocks, 401k, IRA’s or any other assets you may have and will be using and/or needing to show. Copies of these statements tend to be the most difficult part of the process.
As I’ve previously written, a lender is not looking to see how many times you go to Starbucks or if you spend money at the medical dispensaries, they are looking for large deposits, insufficient funds, regular payments that don’t seem to align with liabilities on credit report, any seemingly suspicious activities. This is all because of the Patriot Act and anti-money laundering laws.
The other reasons for reviewing bank statements (assets) is to show you have the funds for down payment and closing costs. This may be why more bank accounts may be required (IRA, 401k, Stocks, etc). If you are like the majority of us, you may have a couple different accounts and transfer funds to and from each other. If this is the case then you will need to provide statements from all accounts in which funds are being transferred.
The last piece of the statements is that you will need to provide ALL pages. This means that the bank statement needs to be the actual statement which will reflect your full name, address and account number (NO transactions summaries) and each statement will reflect the number of pages it includes (ex. 1 of 4) which means you need to send ALL four pages, even the blank or seemingly unimportant pages. I know this can seem silly and doesn’t make sense but an underwriter will require to have ALL pages.
Remember no cash deposits are accepted!! If you had a cash sale for something on Craigslist or Ebay, you will need to provide a proof of sale receipt, transfer of title (if applicable), copy of the ad and then copy of deposit slip. And even with all these documents proving the cash transaction it is still up to the underwriters discretion if they will accept. This is just something to keep in mind if you are planning on selling items to help with down payment and/or closing costs. If possible the best way is to have the cash funds “seasoned” in your account for a couple of months prior to getting pre-approved. Just remember your lender is on your side and they are not prying or trying to inconvenience you, they are on your team and only doing their job and what is required of them. In order to help you, you need to help them!