1. Income Verification:

   • Bank statements help verify the borrower's income by showcasing regular deposits, such as paychecks, dividends, or other income sources.

2. Account Balances:

   • Lenders assess the average daily balance and ending balance to understand the borrower's financial stability. Consistent and healthy account balances are generally favorable.

3. Credit History:

   • While not as detailed as credit reports, bank statements can reveal payment patterns and the handling of overdrafts, providing additional insights into the borrower's financial behavior.

4. Asset Verification:

   • Bank statements may highlight additional assets, such as savings accounts or investments, which can contribute to the borrower's overall financial strength.

How Lenders Use Bank Statements in Refinance:

1. Income Verification:

   • Our underwriters will review 12 months of your bank statements to determine an average income.

2. Debt-to-Income Ratio (DTI):

   • Bank statements are used to calculate the borrower's Debt-to-Income Ratio (DTI), comparing monthly debt payments to income. A lower DTI is generally more favorable to lenders.

3. Creditworthiness:

   • Lenders may assess the borrower's creditworthiness by examining how consistently they manage their accounts and if there are any signs of financial distress.

4. Source of Funds:

   • Bank statements help confirm the source of funds for the down payment and closing costs. This is important for regulatory compliance and preventing fraudulent activities.

Tips for Providing Bank Statements:

1. Complete Statements:

   • Provide complete and accurate bank statements for the entire period requested by the lender. This often includes the most recent two to three months.

2. Explanation for Large Deposits:

   • If there are any large deposits not related to regular income, be prepared to provide explanations. Lenders want to ensure the legitimacy of funds.

3. Consistent Income Deposits:

   • A consistent pattern of income deposits reassures lenders of stable cash flow. Irregularities or fluctuations may require additional explanation.

4. Maintain Account Stability:

   • Avoid large, unexplained withdrawals or overdrafts during the refinancing process, as these may raise concerns about financial stability.

5. Communicate Changes:

   • Inform your lender of any significant changes in your financial situation that may not be immediately apparent in the bank statements.

Digital Statements and E-statements:

• Acceptable Format:

  • Many lenders accept digital or e-statements as long as they are official, complete, and unaltered.

• Print and Save:

  • If using e-statements, it's advisable to print and save them in PDF format to ensure easy submission and access.