Buying A Home
elinrich
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Question about bank statements needed by lender
We are currently gathering all of the documents the lender has asked for to get the loan process rolling. We are going for an FHA loan. I'm not an expert on loans so I'm hoping you all can help me understand something. From what I understand, a 3.5 down payment is required for an FHA loan. So in the end can we put more down? When they see our bank statements they will see we have more than 3.5 saved. Will this affect anything? Sorry if that's a silly question but in the past someone told me not to disclose how much we have available so I'm kind of confused as to why not and now concerned since they will be seeing it in our bank statements. Just trying to learn and understand all of the stuff 
Re: Question about bank statements needed by lender
The minimum amount is 3.5% down, you can always put more down. Just make sure you disclose the amount you want to put down before the loan goes into underwriting.
This happened to us.... we wanted to put more than 3.5% down and never gave them the final amount for whatever reason and once the loan was in underwriting we couldn't change it without delaying closing a couple of more weeks.
As far as your bank statements they just want to check for fraud, terrorism and money laundering. It has nothing to do with how much money you have saved for a down payment
Hello elinrich,
I'm actually a Realtor in Southern California. You do not have to worry about having more money in the bank. All you are required is to put 3.5 down on an FHA Purchase Money Loan. It doen't matter how much you have in the Bank. However, you may want to consider going Convention. You will have to put a little more down, 5% instead of 3.5%, but you can avoid expensive Mortgage Insurance. Mortgage Insurance is not Tax deductable, and is quite expensive for the intial order, and then can cost you a small fortune for up to 5 years. Ugh. Not good. Also, there is a way to get your lender to pay for your Mortgage Insurance. There are a lot of tricks to the trade, I'd be happy to explain further if you would like.
Vimy
Thanks everyone. That's really great info. I'd heard the term PMI thrown around here and there when talking to others who have recently bought homes but haven't really looked into it in detail. After reading y'all's comments I researched it some more. It's definitely something I'm going to bring up to the lender we are working with. I wonder if they will look at both types of loans and compare what they'd look like in the long run. So when do all of these final decisions get put in stone? You know, like FHA, Conventional, down payments etc. Right now we are in the gathering and turning in documents phase but told them FHA. Thanks again or making things clear.
Vimy, I'd love to know how to get lenders to pay for mortgage insurance!
One more reason it doesn' t hurt to have "extra" in the account: there are many more up front costs besides closing costs and down payments, and the bank will want to be sure you have enough to cover those in addition to the down payment.
Typically, you will need to show funds for the down payment, closing costs ( the bank and lawyer fees for drafting up the mortgage and running the numbers), appraisal and inspection fees, and escrow. Escrow for us basically included 1 years worth of homeowners insurance, property tax, and any HOA fees you may have with the property you buy. I remember being surprised by that when we bought our first home.
Be very upfront with the bank on how much you intend to use for your downpayment so they can assess whether or not you have sufficient funds for the other fees. Maybe even give them a range. Once you find a property you like and out in an offer, the. You can start nailing down the specifics and let them know you will be putting more down.
Good luck with the ups and downs of home buying. It can be both fun and frustrating,
I am an underwriter. the reason bank statements are requested is 2 fold.
1. they have to verify your assets and make sure you have enough to cover the amount you stated for your down payment and also any closing costs that aren't financed into the loan-this prevents the bank from having a problem if you suddenly show up to the closing without the money you thought you had (you would be amazed how many people say they have one amount and actually don't and are relying on begging a friend for it or getting a loan etc)-once the bank locks your rate, if the loan is being sold to fannie/freddie they have to guarantee when it will transfer and the bank looses money if the closing falls through.
2. Some loan programs require a certain amount of "reserves" in the bank in addition to your down payment and clsoing costs. They are verifying that you have anything from 2-6 months of mortgage payments somewhere (checking, savings, 401k etc)
In most cases, they are not going to demand that you pay more for a down payment unless they can't fit you into a program with 3.5% down. Other than verifying assets and reserves, they may ask if you have recently had large deposits that seem irrregular just to see if you have a gift that you aren't disclosing-but they won't look at your bank statements and demand that you wipe out all of your funds for a down payment-it is likely they would rather you take a larger loan to cover closing costs and keep your money in the bank as security that future payments will be made.