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Why mortgage lenders are so nosy about your bank statements

Why Mortgage Lenders Are So Nosy About Your Bank Statements

Does it seem like mortgage lenders are so nosy when you apply for a loan and they look at every, single thing on your bank statements? It true, we are nosy.

The Mortgage Minute is a weekly series presented by Laura Borja, Your San Diego Home Loan Expert.

There are a couple of reasons why we are required to look at the activity in you bank statements.

First reason: Blame the government

Money laundering is one reason Lenders are so nosyWe are mandated to report any illegal or unusual activity under The Patriot Act and Anti-Money Laundering Act.

That means that we have to be nosy to make sure you didn’t get any of your funds from naughty places.

Second reason: Loan Guidelines

The money may not be from an illegal activity, and we certainly hope not, but they must meet the loan guidelines. Mortgage Lenders need to make sure that your money is from acceptable sources of funds or it cannot be used for the transaction.

What is an example of an unacceptable source of funds for a mortgage? Borrowing fundsDon't borrow money to get a downpayment

Borrowing funds is not necessarily completely prohibited, but there are some restrictions. Find out more here.

If you go out and take out a loan to get the cash needed and we don’t know about it, then that means we are approving your loan based on incorrect debt to income ratios. Lenders do not like making decisions on loans based on incorrect information.

Does every single deposit need to be documented? Yes and No.

Your paychecks are very easily documented via direct deposit or by cross referencing your paycheck with the deposits on your bank statements.

grandma-with-checkIf you deposited a small check for a rebate you received or your grandma sent you a birthday check, then you probably will not need to document it.

On the other hand, if you have a large deposit or multiple deposits that represent a good portion of what you need for the transaction, then you will be asked to provide an explanation and backup documentation.

To recap: mortgage lenders are so nosy because we have to make sure that all funds are from legal and acceptable sources and that it is not creating additional debt that we do not know about.

Hope that solves the mystery as to why mortgage lenders are so nosy about the activity in your bank statement.

If you have any questions on this topic or any other mortgage-related topic, by all means reach out to me.
Send me an email
Give me a call – (858) 3-LOAN-SD
Text LOANINFO to 44222
Connect with me on Social Media.Laura Borja on Social Media

 

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