A first-time homebuyer in Roseville, or anywhere, knows that there is quite a bit of paperwork involved. You can’t really avoid this, no matter how much you try. Applying for a mortgage can be particularly daunting but at Steelman Mortgages we make it easy. 

One of the your important documents a lender will ask for is your bank statements.

Do you know what this tells your mortgage lender in Roseville, aside from what you spend in a month? Quite a lot.

Bank Statements

Bank statements are documents that are issued either monthly or quarterly, which give a summary of banking activity. These are sent through USPS, e-mail, or sometimes both. Banks generally give you statements so that you can keep better track of your funds and, should there be inaccuracies, report them in a timely manner.

If you have both a checking and savings account, activity from both will likely be in the same singular statement. This also summarizes how much money is in your account and shows a rundown of activities throughout a set period.

If you are self-employed, in addition to bank statements, you must have your federal tax returns submitted. If you are working in a company, then you are on a payroll, which means you would have to provide recent pay stubs alongside W-2s and your federal tax returns.  

“Underwriting” is a process that lenders use to analyze your documents and they will give you an approval or a denial depending on many factors.  One is verifying your bank statements wherein underwriters do research and assess the risk level you pose. Red flags can pop up during this phase, if there are any, such as a low savings account balance, overdrafts, and unstable income. A sudden deposit of a large amount is a major red flag, as it may be a loan that doesn’t reflect on your credit report.

This is important because your down payment is meant to prove that you are a responsible borrower with savings towards a down payment from a steady income. Once that is done, your lender will give you a definitive yes or no.

Sourced and Seasoned

It’s not just about having bank documents to present; it’s what the bank statements themselves contain. Any mortgage lender will always be looking to see if the assets contained in your account are “sourced and seasoned.” By that, it means they know where your funds are coming from (“sourced”) and that these funds have been in your bank account for some time, not just suddenly dropped in there (“seasoned”).

Both factors essentially assist in fraud avoidance. This also gives your lender all the assurance they need to see that you are not using a loan to make a down payment. Therefore, at least two bank statements (all pages) are required.

Steelman Mortgages: Your Roseville Mortgage Broker

Essentially, your bank statement serves as a way for your lender to verify that you have enough funds to make the monthly payments. It also lets them know that you can cover a down payment and any closing costs required.

Looking for a reliable mortgage company in Roseville and throughout California? Steelman Mortgages is here for you. Call us at (916) 847-7263!