Why does a bank need this information

[Scene]

To keep this quick. I'm applying for a mortgage and the bank I chose wants this documentation,

 

1. 2 recent pay stubs.
   
2. W2s from 2008 and 2007
   
3. Credit Report
   
4. Bank statement to show down payment.
   

 

I've sent in all the info but they want more. In particular they want to know every little transaction in my bank account. I find this to be intrusive, they shouldn't even know what bank I'm with anyways. Not sure what difference it makes to them where the money came from.

 

I'm afraid they'll ask me for my first born and a pint of my blood next, does it mater if it's a gift too?

[clambert1273]

they have every right to ask about any of your finances.. they are loaning you a good chunk of money and want to ensure that you can and are willing to pay it back.

 

They want to see bank accounts to find out how much money you have in "reserves" or to offer in earnest money, any large deposits will have to be explained or "seasoned"for 60 days... they will question transactions as it shows a spending pattern/behavior...

 

remember this is not like it was 3-5 years ago - everyone has been burned and it is much more detailed (which it should have been before).

[fueloveskhou]

Yes they will ask for a lot of stuff. Be prepare to sign a lot of more papers. Than wait for about a 1 month to close. In between that inspections, appraisal and more paper work. Than catching and rushing stuff for the underwriter, bank statement again, credit report, more paper to sign, oh forgot this paper, oh come in and sign this one, oh we need this done before we close (in 4 days). Oh sorry the underwriter doesn't want it that way, can you redo it. Oh no not that way (you just told me it was that way???). I am expecting maybe a last credit report pulled on the day of or before also (pulled two already).

 

Lots of stress buying. Worth it in the end. Got to buy one sooner or later.

[Brian B The Loan Professor]

Relax this is standard stuff. They need to knwo where the money comes from so they are asking about the bank statements

Any large deposits other than the usual payroll will be suspect. If it is a gift expect to need to document every but as much from the giftor. They will want a gift letter and a deposit slip, a copy of the check and some (more than not) will want to see a copy of the bank statement where the funds came from. I am assuming you are doing an FHA loan and the funds cannot come from a source which is not allowed.

 

Good Luck you will get through this

B

[Scene]

Thanks all.

[Daddy]

Yes they will ask for a lot of stuff. Be prepare to sign a lot of more papers. Than wait for about a 1 month to close. In between that inspections, appraisal and more paper work. Than catching and rushing stuff for the underwriter, bank statement again, credit report, more paper to sign, oh forgot this paper, oh come in and sign this one, oh we need this done before we close (in 4 days). Oh sorry the underwriter doesn't want it that way, can you redo it. Oh no not that way (you just told me it was that way???). I am expecting maybe a last credit report pulled on the day of or before also (pulled two already).

 

Lots of stress buying. Worth it in the end. Got to buy one sooner or later.

 

LOL.

 

I've been working with this mortgage broker since August. I've heard about 5 times that "we should be closing in the next week" or "that's the last thing we need that I know of". Absolutely ridiculous!!!

[Scene]

Relax this is standard stuff. They need to knwo where the money comes from so they are asking about the bank statements

Any large deposits other than the usual payroll will be suspect. If it is a gift expect to need to document every but as much from the giftor. They will want a gift letter and a deposit slip, a copy of the check and some (more than not) will want to see a copy of the bank statement where the funds came from. I am assuming you are doing an FHA loan and the funds cannot come from a source which is not allowed.

 

Good Luck you will get through this

B

 

This isn't an FDA loan at least not... what did you mean by "the funds cannot come from a source".

[Brian B The Loan Professor]

what did you mean by "the funds cannot come from a source".

 

If you read the whole sentence it makes perfect sense

the funds cannot come from a source which is not allowed

 

Every penny you bring into the deal must come from an allowable source and be documented

You cannot borrow money use cash advances on credit get a gift from an unallowable source so you need to show where the money came from

 

If not FHA are you putting 20% down? Using USDA? What is the program you are using they are all a little different

 

B

[Lynn37]

I felt like I was giving my first born, But the fact is they need it so we can get the mortgage.

 

The process if all your paperwork is together is not that painful,

 

My lender was happy to see that I was able to explain every dime of DH and my money. IF DH gave me 270.00 for our car insurance, you could look at his banks statement see 270.00 go out, and within a day see the same 270.00 go in my bank account.

 

Lender says underwriters like to see stuff like this.

 

To me it is worth it, Just waiting to close

[jop3]

Yes they will ask for a lot of stuff. Be prepare to sign a lot of more papers. Than wait for about a 1 month to close. In between that inspections, appraisal and more paper work. Than catching and rushing stuff for the underwriter, bank statement again, credit report, more paper to sign, oh forgot this paper, oh come in and sign this one, oh we need this done before we close (in 4 days). Oh sorry the underwriter doesn't want it that way, can you redo it. Oh no not that way (you just told me it was that way???). I am expecting maybe a last credit report pulled on the day of or before also (pulled two already).

 

Lots of stress buying. Worth it in the end. Got to buy one sooner or later.

 

 

haha! you know the process inside and out.

 

 

Good luck, OP. I know it seems intrusive and frustrating, but that's the standard these days. The questions about your bank transactions are basically to verify where you got the down payment money. They don't want you taking any sort of loan, even from family or friends, and they don't want you using cash advances or getting "gifts" from unrelated parties (that's not usually allowed). Bank don't want anything to 1) threaten their lien position on the home or 2) increase your debt to income ratio from what they have approved, both of which could happen if you borrow the money from an unacceptable, undocumented source.

[resqume1]

I'm a bit frustrated with the process myself. This is not my first mortgage. I have over 20 years of on time mortgage payments and during half of that time I owned 2 different houses with mortgages and never a late payment. The money I have for the down payment is not a local bank so I had them cut me a check and mail it to me so I would have easier faster access to the money. When the check got here instead of depositing the whole amount I kept a couple hundred out for cash and deposited the rest. The deposit was still more than double the amount I need for DP and closing. The deposit was made 4 business days after the original check was cut (they had to mail it to me). Its very obvious its the same money but the UW does'nt want to let me use it because the amounts don't match exactly.

 

The UW also is not allowing about 75% of my income. okay. But yet still wants the bank statements and explanations for activity in the account where the money they won't allow is at. If they are'nt going to allow the income and the money for DP and closing are'nt coming out of that account I don't think I owe them any explanations and I really don't think its any of thier business.

[RVD26]

Yes they will ask for a lot of stuff. Be prepare to sign a lot of more papers. Than wait for about a 1 month to close. In between that inspections, appraisal and more paper work. Than catching and rushing stuff for the underwriter, bank statement again, credit report, more paper to sign, oh forgot this paper, oh come in and sign this one, oh we need this done before we close (in 4 days). Oh sorry the underwriter doesn't want it that way, can you redo it. Oh no not that way (you just told me it was that way???). I am expecting maybe a last credit report pulled on the day of or before also (pulled two already).

 

Lots of stress buying. Worth it in the end. Got to buy one sooner or later.

 

LOL, this describes almost EXACTLY the process I went through a few months ago.

[Bloody but Unbowed]

I can possibly understand your frustration with the unallowable money and stuff. But I am at the point where I will just give them the passwords and logins so they dont have to ask and can get info when/what they want

 

S.

[nothingtolose]

they have every right to ask about any of your finances.. they are loaning you a good chunk of money and want to ensure that you can and are willing to pay it back.

 

They want to see bank accounts to find out how much money you have in "reserves" or to offer in earnest money, any large deposits will have to be explained or "seasoned"for 60 days... they will question transactions as it shows a spending pattern/behavior...

 

remember this is not like it was 3-5 years ago - everyone has been burned and it is much more detailed (which it should have been before).

 

+1

[vintagespeed]

if your escrow goes like mine, hopefully not for your sake, by the time you get to closing your account money will have aged past the 60 day history they review.

Edited November 18, 2009 by vintagespeed

[clambert1273]

haha mine has just by default of looking for a house LOL