Bank statements for mortgage
Mortgage applications require bank statements and your credit report before they can give you a mortgage approval. Most lenders will use these to verify your income, affordability, and other eligibility factors.
As mortgage brokers, we often get asked what information the lender needs? How many months of bank statements and bank accounts do you need to submit? And what can you do if your bank statements have been rejected for a mortgage? These are just a few of the questions this guide will answer.
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What number of month’s worth of bank statements are required for a mortgage application
Many mortgage lenders will request your most recent bank statements, although some may ask for six months. A few lenders won’t go back as far as that and may be content with one to two months.
Your mortgage lender may contact your bank to verify the information that you have provided. Usually, however, your mortgage lender will contact your bank by phone to confirm the information you have provided. To make the process fast and simple, most banks offer downloadable forms for lenders through their websites.
Why bank statements are important for mortgage lenders
You will need to provide bank statements to mortgage lenders so they can verify your income affordability and check for risk factors. They also need to see your deposit funds.
Lenders and underwriters will be looking for the following information in your statements:
- Your income
- Your outgoings
- The availability of funds to deposit
- Your deposit source
- Excessive gambling, payday loans, and fraud are all risk factors
The mortgage lender will verify that you have sufficient income to pay for the mortgage you are applying for. Your fixed outgoings will offset this to calculate your ratio. Your ratio doesn’t have to be a fixed percentage. However, if you have excessive outgoings, it could impact your ability to borrow.
Lenders and underwriters may also request to see the deposit funds in your account. They will like to trace their source to verify that they are legitimately earned, saved, or gifted.
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Bank statements issues can lead to mortgage rejection
There’s a chance that the lender will reject your application if your financial situation isn’t strong enough to convince you that your mortgage can be afforded or if you don’t have enough money to deposit.
If the following information is not evident in the applicant’s statements, mortgages may be denied.
- Untraceable cash deposits are a no-no for mortgage lenders because of the risk of money laundering.
- Deposits from employers that the employer gifts: This is due to the risk of fraud
- Mortgage providers may be unable to track the origin of funds from overseas savings. However, some lenders are more flexible.
- Gambling funds: It’s possible to win gambling winnings for a mortgage deposit. However, evidence of regular gambling on bank statements will likely lead to more suspicion.
- Use payday loans: Even if the payday loan has been paid off, it can be difficult to get a mortgage. Although other forms of unsecured borrowing can also be risky, some providers are more flexible.
What should you do if your mortgage has been declined because of a bank statement issued?
Here are the steps you can take to get your bank statements back on track if you submitted them to your lender, but they rejected you for something they didn’t like.
- Do not reapply immediately after being rejected. This could cause credit problems and make it difficult to get a mortgage. Either you will need to solve the problem or find a mortgage lender willing to overlook it.
- We can match you with a broker to help you save a stalled application for a mortgage. Talking to a broker is the fastest, most efficient and best way to get a mortgage approved. A mortgage broker can help you solve the problem or refer you to another lender. You can be sure that your broker-matching service will match you with an advisor who assists customers like you to overcome mortgage rejections daily.
- Take a break while your broker takes care of the rest. Your broker will lead the next steps. Your broker will conduct a quick fact-finding to determine what your lender did not like about your bank statements. Then, your broker will evaluate whether you have grounds to appeal the lender’s decision or if it is best to change lenders.
Our brokers have strong working relationships with mortgage lenders and can offer second chances to borrowers who have been rejected.
These lenders are also known for being flexible and overlooking issues other banks cannot.
Send us an enquiry today to find your perfect mortgage broker.
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How to deal with fear if your application is declined
Talk to a mortgage broker if you find anything on your bank statements that could cause a lender to reject your application.
A mortgage broker can help you determine the risk to your mortgage plans and suggest solutions. They will also be able to recommend ways to fix the problem, as well as a lender who is willing to work with you to resolve it.
Our brokers can help you find a lender that is…
- Mortgages offered based on higher Income Multiples
- Offers 5% deposit mortgages
- Accepts non-standard deposit sources
- High street lenders have a lower appetite for risk than the high street.
Is there a mortgage lender that doesn’t require bank statements?
While most mortgage lenders will require you to provide bank statements, a minority of them may use other methods to evaluate your creditworthiness and affordability.
Santander and Halifax, two major mortgage lenders, recently stated that they don’t ask for bank statements in standard mortgage applications. They have many other tools that can be used to evaluate a customer’s financial and creditworthiness.
Keep in mind that if there is anything on your bank statements you don’t want lenders to see, the brokers that we work with can help you find a mortgage provider that overlooks issues most banks and building societies consider deal-breakers.
Your broker may be able to match you with a lender that doesn’t view your bank statements if this is your preference. However, remember that your broker will need access to your bank information at some point to comply with industry regulations.
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These are the key takeaways from this guide
- Many mortgage lenders require you to show your bank statements.This is done to evaluate your eligibility and affordability. If they find something they don’t like about your most recent statements, they may decline you for a mortgage at valuation or offer you a less favourable deal.
- A broker can help you if you’re worried about being declinedA mortgage broker can assist you if there is something in your bank statements that could affect your mortgage application. A mortgage broker can help you assess the risk and suggest solutions. They will also match you with specialist lenders who may approve you.
We can help you find the right broker.
You do not want to choose a random broker. We are here to help you find the right broker for you.
Our broker-matching service is free and will quickly assess your situation to match you with the best mortgage advisor. You can be sure they will find the best solution for you if there is an issue with your bank statements.
Call today to enquire. We’ll match your needs with the ideal broker right away.
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Bank Statement for Mortgage FAQ’s
Are bank statements required if I am self-employed?
Bank statements may be required if you are a business owner or a contractor. Most mortgage lenders will require at least one to three years of bank statements to prove that you have a stable income.
Learn more about mortgages available to self-employed persons in our guide.
What happens if I don’t have enough bank statements to cover my expenses?
Many lenders will require hard copies of your bank statements. You can request them to be printed and sent to your bank if you don’t have them. You can also go to your local branch to have them printed on-site.
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