Are you sure you can get a Bank Statement Home Loans in Houston? Before turning in your bank statements to a lender you should take a look at them with a mortgage underwriter’s eye to ensure you have everything required.
Why? The lenders try to look for any mistakes in your bank statements before approving your loan, as the bank statements are the only major document presented in these loans. If they found any mistake, you have to give long explanations.
Lenders go through your documents when you apply for a loan through underwriting. They mainly check your credit score, employment and income, and credit report. Therefore, you should avoid any large purchases on your credit card right before approval and closing.
If you want to know how to review your bank statements before submitting them to the lender, never do these three things mentioned below.
1. Don’t allow undocumented and large deposits
Irregular or outsize deposits indicate that your required reserves, down payment, and the closing amount is coming from unacceptable sources. However, you can borrow funds, or you can take a cash advance that won’t reflect on your report.
A large deposit can also be considered as an ‘illegal” gift. If you don’t have the documents to prove that the source of the big deposit is acceptable under the loan program guidelines, the lender can not accept the payment, and he should proceed with whatever amount is left to qualify.
If you can justify the source of payment then it is counted as an acceptable source. For example, if you have received a family or someone from another relation, and down payment funds from the Downpayment assistance program, you have to wait for 60 days before applying for a mortgage.
Bounced checks
If your checking amount is messed with NSFs or non-sufficient funds charges or multiple overdrafts, the underwriters conclude that you may not be great at managing your finances. Even in some cases, an additional scrutiny check is done if bank statements show NSF fees.
For FHA loans, the borrowers need to go through a manual approval process along with the computerized process, if NSF fees are reflected in the bank statements.
Irregular activities, regular payments
Ensure that there is no monthly payment that does not correspond to your credit card amount as mentioned in the application. For example, if you take loans from an individual that report may not show up in your credit report.
But, if you keep making irregular payments, it might alert your lender and you might not get a bank statement loan approval.
These are some of the good reasons that you should keep in mind, and always double-check your application and bank statement thoroughly before sending them for loan approval. The thing is you not only need to be honest, but also you should not appear to be dishonest. Because your lender will not turn a blind eye to anything he finds suspicious.