This BLOG On Adding Yourself To Another Bank Account To Qualify For Mortgage Was UPDATED And PUBLISHED On June 25th, 2020
One of the requirements borrowers need to provide lenders is two months’ bank statements as part of the documents that are required.
- Lenders will carefully analyze 60 days of bank statements when processing and underwriting mortgage loan application
- Things mortgage underwriters will look for in bank statements are irregular deposits and insufficient funds
- A bank overdraft in the past 12 months can be a deal killer by most lenders
- Mortgage underwriters really frown upon bounced checks and overdrafts in the bank statement
- Borrowers with overdrafts in the past 12 months may not be able to use bank statements
- But may resolve this issue by adding yourself to another bank account to qualify for a home loan
- We will cover potential solutions for borrowers who had issues with their bank statements in the past 12 months
- If there are no solutions, then adding yourself to another bank account to qualify for a home loan may be the only option
In this article, we will discuss and cover Adding Yourself To Another Bank Account To Qualify For Mortgage.
60 Days Of Bank Statements Required By Mortgage Lenders
All mortgage lenders will require 60 days of bank statements.
- When borrowers provide 60 days of bank statements, loan officer and/or mortgage processor will carefully review bank statements
- One of the first things loan officer will review in bank statements are deposits
- Regular deposits such as direct deposits from the employer are fine
- However, the loan officer will be reviewing any irregular deposits that are larger than $200.00
Lenders will question where that money came from.
Irregular And Large Deposits
If the irregular deposit came from a source where it cannot be documented, that large irregular deposit cannot be used as verified assets:
- It will be deducted as available funds that can be used for closing the home loan
- For example, if the borrower has one thousand dollar deposit and that money was cash for doing a side job, that one thousand dollar cash deposit cannot be used and counted towards seasoned funds
- Larger irregular deposits and cash deposits need to be seasoned in the bank account for at least sixty days
Sixty-day seasoning is required in order for borrowers not to provide the source of the deposit.
Overdrafts In Bank Statements
Overdrafts are taken extremely seriously by lenders.
- Lenders do not want to see any overdrafts in bank statements in the past 12 months
- Whether an overdraft is five dollars or a thousand dollars, overdrafts are treated the same way by lenders
- As mentioned, lenders want to see sixty days of bank statements from borrowers
- Providing 60 days bank statements and not having any overdrafts in the past 60 days will not get borrowers off the hook when it comes to overdrafts
- Providing 2 months bank statements not having any overdrafts on bank statements in the past 2 months is a must
One or two overdrafts may not be a deal killer with some lenders.
Bank Overdrafts In The Past 12 Months
Borrowers with bank overdrafts in the past 12 months will be discovered by mortgage underwriters:
- How can they find out?
- When borrowers provide lender two months bank statements, there will be a column on actual bank statements that will state year-to-date-overdraft charges
- Even though the specifics of the overdrafts will not be posted on most recent bank statements, the year to date overdrafts charges will
- The lender will know borrowers had bank overdrafts in the past 12 months due to year to date overdraft fees
Solutions To Overdrafts In Bank Statements By Adding Yourself To Another Bank Account
If you do not have any overdrafts in a bank account in the past 60 days but do have overdrafts in bank accounts in the past 12 months, then try submitting 60 days of bank statement printouts from the bank in lieu of the actual bank statements.
- Most lenders will take bank printouts in lieu of actual bank statements
- Just go to the bank teller at the local bank
- Ask the teller to provide 60 days of bank printouts
- Tell teller it is needed for the loan officer
- Make sure that the bank teller signs, stamps, and dates every page of the bank statement printouts including blank pages
- Why bank printouts in lieu of actual bank statements?
- With bank printouts, the year-to-date-overdraft fees are not listed
- So in a way is a don’t ask don’t tell policy
The bank print outs will just list the deposits, withdrawals, and ending balances and that is sufficient for lenders.
Adding Yourself To Another Bank Account As Solution
There are situations where borrowers have tons of activities on their bank accounts. They often have multiple overdrafts and irregular larger deposits that cannot be sourced and their bank statements look like a road map.
- Sometimes it may be the best interest of borrower by not submitting such bank statements and risk killing the mortgage loan
- It is not illegal to not disclose bank statements that borrowers will not be used to qualify for the mortgage loan
- On situations like these, it may be best by adding yourself to another bank account to qualify for a home loan
- Borrowers can ask a family member such as a spouse, child, parent, or even business partner to see if adding yourself to their bank account as a joint account holder is possible
The other party will add borrowers as a joint member of their bank account.
Adding Yourself To Another Bank Account And Submitting To Underwriter
After they added borrower on to their bank account, the borrower would get a bank statement print out from the bank teller and have the bank teller sign, date, and stamp all pages of the bank statement print outs:
- Borrowers will also need a letter from the main bank account holder that you have full access to the bank account
- As for the funds required to close, borrowers can always get a gift from a family member and have those funds deposited in a bank account
- Make sure the donor of the down payment signs a gift letter
- Gift letter needs to state that the gift funds are a gift and will not be paid back after closing
Borrowers running into a situation where the bank account is a mess and needs to qualify for a mortgage loan, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Borrowers can also email us at gcho@gustancho.com.
