Friday, July 30, 2010

Why Do Lenders Want My Bank Statements?

"Why does a lender want to see my bank statements?"

Here are the reasons that lenders ask to see a borrower's bank statements:

They need to verify that the money being used for the down payment and closing costs really belongs to the borrower. If there are deposits that came from sources other than a pay check, the borrower will need to provide some sort of documentation showing where they got the money.

The lender wants to make sure that the borrower does not have any insufficient funds charges. If they do, then they will need to provide an explanation about why they had problems keeping track of their money.

The lender is looking for loans that might not show up on the borrower's credit report. If a borrower gets a loan for a car, furniture, or something else directly from their bank, the bank might not report it to the credit bureaus. However, the lender must count the debt against the borrower in order to sell the loan to Fannie Mae, Freddie Mac, FHA, or VA.

The lender wants to make sure that the borrower has full access to all of the money in their bank accounts. If the borrower has a joint account with someone other than their spouse, the lender will require a letter from the other person saying that the borrower can use all of the money in the account.

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