When it comes to applying for a home mortgage, lenders are not taking any chances. They are quite thorough in reviewing your financial standing before deciding whether or not to grant your loan application. They check for various things, from your ability to make a down payment to your capacity to manage monthly mortgage repayments.
Your bank statements are an open book in this regard, which is why it’s crucial to know what lenders focus on and to make any necessary adjustments to secure that loan approval and favorable interest rate.
Avoiding Overdraft Fees: A Critical Factor
One of the initial checks a lender usually performs is asking for up to two months of your bank statements. The presence of numerous overdraft fees is not something they want to see. Regardless of the reason, multiple instances of overdraft fees or insufficient funds can signal to a lender that you may not be adept at financial management.
Unexplained Large Deposits: A Cause for Concern
When a lender sees sizeable deposits in your account without a clear explanation, they might get skeptical. Such unaccounted funds can make them question the legitimacy of the source of these funds. Without adequate justification and supporting documentation, a lender may choose to exclude these amounts from their consideration, which can jeopardize your loan application.
Undisclosed Credit Accounts: A Hidden Issue
You may think borrowing money from a friend or family member and paying them back in installments is an internal matter, but not so when it comes to mortgage applications. Any recurring payments showing up on your bank statements that are not part of your credit record can raise questions. It’s advisable to disclose any such arrangements to the lender as they would consider it a form of credit, whether it is formally reported or not.
Selecting the Ideal Real Estate Expert Post-Approval
Once your loan is approved, the real adventure begins: you can start hunting for your perfect home. This task becomes considerably easier when you have the right real estate professional guiding you. For further assistance, you can contact Berkshire Hathaway HomeServices at (310) 373-0021. We look forward to helping you join our growing list of happy homeowners.
Navigating the mortgage landscape doesn’t have to be a daunting process. A better understanding of what lenders are looking for can prepare you to face the scrutiny with confidence. With the right steps and a competent real estate professional by your side, securing that dream home may be closer than you think.