Why Do Mortgage Lenders Need Bank Statements?

About a century ago, only the wealthy received housing loans. They had the money and the assets and were good friends with the top bankers. Nowadays, you might find it easier to get a mortgage, but lenders like the State Bank of Cross Plains might ask for bank statements. Why?

Why Do Mortgage Lenders Need Bank Statements?

Sourced

In many parts of the world, the masses are being promised anything and everything. Slovenia stated that water was a human right. In the 2000s, people without income or assets, could get a mortgage. Sadly, those salad days are practically over.

Today, the banks are cutting back. They want to verify that all borrowers have legal income and legal assets. Some of this is due to new financial regulations established after the Sub-Prime Mortgage Crisis of 2008.

Your bank account balance will be viewed to determine if you have enough for the house down payment. The bank also wants to determine the “source” of your money. It wants to see if you have a job, how long you have held said job and whether that job is reliable.

How long you have held your job could determine if you qualify for a mortgage. It could also determine the interest rate paid. Criteria like these can determine the likelihood of you repaying your loan.

Seasoned

The concept of being “seasoned” means “how long have your funds been in your bank account?” Banks want you to be able to save money for a long period of time. Your credit score includes how long you have had access to credit; certainly, this longevity is a plus.

Are you one paycheck away from default?

I think you know people who get a paycheck and the money eats a hole in their pocket. Half way through the weekend, their money is all gone. These people are more likely to have bad credit ratings.

Seasoning is like a well-aged wine. It demonstrates maturity, longevity, determination and prudence. You have solid money management skills and can properly budget for the long haul.

Banks don’t like it when you take out a loan for your down-payment. So, they might check this while viewing your bank account statements. They want you to have invested your own money to gain some equity.

Financial lenders want to see that you have enough for closing costs and the first couple of monthly mortgages. They also might check your banks statements, multiple times. Bank statements help lenders gauge your creditworthiness.

About Anica O

About the author: A recent college graduate from University of San Francisco, Anica is a full-time freelance writer. She has already published articles for a variety of industries, ranging from technology to beauty to health. She loves dogs, the ocean, and anything outdoor-related. You can connect with her here.