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Bank Statements For Your Mortgage: Why Are They Important?

Jamie Johnson4-minute read
UPDATED: March 11, 2023

When you apply for a mortgage, your lender will request a variety of documents depending on the type of loan you applied for. One particular document they’ll want to see is the bank statement. Mortgage lenders use bank statements to verify that you have a steady income and can afford the various costs that come with buying a home.

Why Do Mortgage Lenders Need Bank Statements?

When you apply for a mortgage, your lender uses bank statements to verify that you have enough money to make your monthly mortgage payments and cover a down payment and closing costs.

It also shows your lender that your assets are sourced and seasoned. When your assets are “sourced,” your lender knows where the money is coming from, while “seasoned” implies that the funds have been in your account for a while.

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How Far Back Do Mortgage Lenders Look At Bank Statements?

Most mortgage lenders typically require 2 or 3 months’ worth of bank statements for loan approval. If your bank doesn’t send monthly statements, you may be able to submit a quarterly statement.

By looking at multiple statements, your lender gets a better picture of your account history. They can verify that the money in the account belongs to you, and that you haven’t borrowed money to pay for the down payment.

In most cases, two months of statements gives lenders enough information. However, you may have to provide between 6 to 12 months’ worth of statements if you’re self-employed or have a high debt-to-income (DTI) ratio.

What Do Mortgage Lenders Look For On Bank Statements?

Here’s what mortgage lenders look for when analyzing your bank statements:

  • Proof of income: Your lender will verify that your monthly income matches what you receive from your employer. Your bank statements and pay stubs will show if you have the cash flow to make your monthly mortgage payments.
  • Consistent monthly payments: When your lender checks your bank statements, they’ll verify any additional monthly payments you mentioned on your loan application.
  • Money in your account: Lenders like to see that borrowers have some type of cash reserve – this shows that you can pay for your closing costs.
  • Expense history: When your lender looks at your expense history, they’ll be checking to see if you have a history of making unusually large withdrawals.
  • Bounced checks or overdrafts: If you have a history of bounced checks or overdrafts, this can indicate that you may be a riskier borrower.
  • Large deposits and withdrawals: If you recently deposited or withdrew large amounts of money, this can look suspicious to your lender. You’ll need to be able to explain where that money came from or went.
  • Low savings amount: If your savings is low, that could indicate that you don’t have the cash to fund your down payment and closing costs.

How Do Mortgage Lenders Check And Verify Bank Statements?

You’ll send either paper or electronic bank statements to your lender. Your lender will then likely verify the information in your bank statements by contacting your bank to confirm its validity.

Can Bank Statements Affect A Mortgage Application?

Possibly, but it’s unlikely your bank statements alone will prevent you from getting approved for a mortgage. A bank statement is one of many factors lenders look at to determine whether you qualify for a loan. Your credit score and history, debts and income will also play a large role in whether you qualify.

How Many Bank Statements Do You Need For A Mortgage Loan?

When you apply for a mortgage, your lender will require at least two months of bank statements. Your lender wants multiple statements to ensure you haven’t already taken out a loan.

Do Lenders Check Bank Statements Before Closing?

After you’ve provided your bank statements and gone through underwriting, your lender will not re-check your statements before closing. They’re only required to look at your bank statements when you originally submit your application. However, your lender will re-check your credit score, credit report, employment and income before approving the loan.

How To Find Your Bank Statements

If your bank offers online services, then you should be able to access a digital copy of your bank statements and download a free copy of your statements as PDFs. In addition to downloading statements, you should be able to view your most recent transactions under your account summary.

If you prefer paper statements over digital copies, you can submit the paper statements your bank mails to you every month. If you’ve misplaced your statements, you can contact your bank and request another copy.

The Bottom Line

When you apply for a mortgage, it’s easy to feel like you’re under a microscope. Your lender will request a lot of information, including bank statements. These documents contain valuable information your lender needs to get an idea of your financial situation and approve you for the loan.

If you’re hoping to buy a home in 2022, the first step is to get prequalified. You can start the process today with Rocket Mortgage®.

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Jamie Johnson

Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.