When you think of tools that home financing providers use to determine your qualifications as a buyer, the first thing that may come to mind is a credit report. That\u2019s a great tool since it shows patterns of successful management of obligations, as well as how much debt you have.<\/p>\n
But your credit report doesn\u2019t provide all the data the provider needs. They\u2019ll also ask to see your recent bank statements\u2014the record of transactions in your bank account. That\u2019s because bank statements offer a day-to-day window into how you manage your finances.<\/p>\n
Your financing provider is specifically looking for two things: overdrafts and proper accounting for all deposits that appear on the statement.<\/p>\n
Overdrafts: Overdrafts, especially when there are a lot of them on a regular basis, will draw attention, raising several questions: Are you short of funds each month, or do you need to balance your checkbook better? How are you recovering from the overdrafts? What will keep this from happening in the future, once we buy a home together?<\/p>\n
Deposits: All deposits on a bank statement must be accounted for. Electronic payroll deposits normally need no explanation, as the dates and amounts can be cross-checked with pay stubs. Other infrequent or large deposits will need to be explained and documented.<\/p>\n
Basically, home financing providers need to see that you have steady sources of income that can be used for future home payments. They\u2019ll also take note of any gifts you may have received to help you secure financing. They may need to follow up with the gift giver too.<\/p>\n