What do loan officers look for in your past bank statements?
Question by BGOQ: What do loan officers look for in your past bank statements?
As I’ve been doing homework on the loan process for a first-time mortgage, it struck me as peculiar that it is recommended (required?) to bring six months of bank statements to your loan visit. This seems to me to be a little invasive on privacy, yet I’m not sure what the purpose is. What do they look for specifically? Is it to verify income, or do they actually look at every single item? What if I have multiple accounts/banks, should I bring six months worth of statements from each bank? Is this the same with bank loans as it is with mortgage brokers? Always, thanks for your answers!
Best answer:
Answer by Mike M.
They look at the general activity, deposits, overdrafts, balance etc. It gives a rather good picture of how you handle personal finances. They also want to know where the down payment is coming from if it’s not in your account. I would take all statements from all accounts. You’re better off not trying to hide anything, they will find it. This is standard for mortgages whether a bank or broker. It’s only “invasion” of privacy if you don’t give prior permission. You can refuse to provide any info you want, but you may not get the mortgage.
What do you think? Answer below!
Banks need to determine where your down payment is coming from. They don’t want you borrowing the money from someone else. That would mean you need to pay 2 loans (the bank’s mortgage and your loan to you friend). If they see the money in your account for 6 months, then they know where the money came from.
The comments from the other answers is also correct.
Bank statements can be an alternative way to verify income if you are self employed, or have other income coming in every month that you need in order to qualify for the mortgage. This is a good strategy on the part of your loan officer to save time and stress later on in the loan process. It may seem invasive right now, but the loan officer is looking ahead to what may occur and is only trying to collect as much information as possible right now. You never know what a lender will need, or what twists and turns may be ahead. I think you may have a good loan offier, but remind him or her that you haven’t been through this 6 times last month abd you will need them to slow down & explain this process to you.