Hello, I’m in the process of applying for a mortgage loan, and I was a bit taken aback when the loan officer asked me about a couple of transactions from my checking account. Specifically, they wanted to know why I had sent a couple of hundred dollars to a family member recently.
Is this normal? Do banks typically scrutinize your entire transaction history like this? I thought they just looked at your credit score and financial statements. Any insights or similar experiences would be really helpful
Hi!
It’s completely normal for banks to scrutinize your transaction history when you’re applying for a mortgage loan.
While credit scores and financial statements are crucial, lenders also look at your bank statements to get a comprehensive view of your financial health.
Here are a few reasons why they do this:
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Income Verification: They check for regular deposits to ensure you have a steady income to repay the loan.
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Expense Analysis: They look at your spending habits and recurring expenses to gauge your ability to manage money responsibly.
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Account Stability: They want to see a stable financial history. Large unexplained transfers or erratic account behavior can raise concerns.
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Risk Assessment: By reviewing your bank statements, they assess the risk associated with lending you money.
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Fraud Detection: This helps in detecting potential fraudulent activity or inconsistencies in your financial records.
Typically, lenders ask for two months’ worth of bank statements. So, it’s not unusual for them to question recent transactions, especially if they seem out of the ordinary.