11 Nov, 2019
When it comes to securing a mortgage, your bank statements are a vital piece of information. They give lenders a snapshot of your spending habits, provide proof of income, and help establish that you’re a responsible borrower. So chances are you’ll need your bank statements for your mortgage application.
While in theory, pulling together your bank statements should be the easiest piece of the home-buying puzzle, this isn’t always the case. Some customers struggle to locate where to download their bank statements in their internet banking, aren’t sure how far back to go, or are uncertain whether they need their transaction history too.
That’s why we’ve put together this handy guide to getting your bank statements together to provide to your lender. From why they’re important to where to find them and what lenders are looking for in your bank statements, we’ve answered all your most pressing questions so that you’ll have that mortgage application approved in no time.
For your lender to accept this document as a bank statement, it needs to include:
It’s important to note that a bank statement is different from your transaction history. A bank statement is a list of transactions made within any given period (which you can choose yourself within your internet banking). Generally, you will be able to download this as a CSV file to send off.
It’s important to note that most lenders want to see both bank statements and your transaction history.
As you can cover a longer period of time with your transaction history, they give lenders a clearer idea of your overall financial habits which helps support your mortgage application. They also tend to be more recent, as your bank statement is issued periodically while your transaction history shows everything up to the moment you generate it.
Yes, bank statements show your transactions. However, this will only be within a certain timeframe, as determined by the statement period chosen when the report was generated.
Most lenders will require two to three months of bank statements, as well as the transaction histories from that period. Generally, lenders will ask for bank statements no older than 60 days to support your mortgage application.
By law, financial institutions must retain a record for seven years after the transaction.
Your bank statements and transaction history give mortgage lenders an insight into your spending behaviours, how much you earn, your expenses and any debt obligations. Generally, the things they will be keeping an eye out for include:
This is a fee charged by your bank when you spend more money than what’s actually in your account. This can include dishonour fees from bills or transactions that have been scheduled to automatically go through, despite the money not being there.
Dishonour fees can indicate to lenders that you’re financially irresponsible, so it’s best to avoid them. If you have any overdrafts on your account, it’s best to wait a few months before starting your mortgage application. You should also set reminders for when your direct deposits will come out to prevent it happening in the future.
Large, irregular deposits
These can be a red flag to mortgage lenders, as it can indicate that you’re receiving money from external sources – like parents. This can give a lender an inaccurate view of how responsible you are as a borrower, so all gifted deposits must be accompanied by a note from your parents.
Excessive or irresponsible spending
Lenders will check the living expenses you’ve listed on your mortgage application against your transaction history to ensure it all lines up. If they find that your spending is actually higher, or you’re using it on things like UberEats every night of the week, this can diminish your borrowing power or even make it difficult to obtain a loan.
While some financial institutions send bank statements via mail, the best way to access them is through online banking.
Nowadays, most banks have an online access portal, meaning you can avoid going into the branch. To access your statements, you can usually use the app, but it’s easiest to view and print these using a desktop.
Each bank has a different process to download these, so it’s important to check the specific procedure for yours. Here, we’ve included a step-by-step guide to getting your bank statements and transaction histories from five of Australia’s biggest banks.
If you have a Commonwealth Bank account, you can use NetBank to access the required documents.
The ways you can send your documents to your lender include:
Most online banking websites will give you the option to print out your bank statements or transaction history. You can then scan this document back in and attach it to an email to send to your lender or broker
If you don’t have access to a scanner, you can also use an app like TinyScanner or ScanBot to take a virtual scan, then attach it to an email.
After printing your document, you can also place it on a flat surface, take a picture of it and send it in an email as an attachment. Just be sure to check on your computer that it’s clear enough to see the information.
This option may seem a little high-tech, but it’s actually the quickest and easiest option. When viewing your transaction history, simply select your date range then click ‘print’ where you will need to adjust your print settings so that the destination of your print job reads ‘Print to PDF’ or ‘Save as PDF’.
This will download or save the file to your computer, allowing you to then attach it to an email.
Providing the correct documentation is essential when it comes to applying for a mortgage, and your bank statements and transaction history are no exception. In fact, these are arguably the most important documents you’ll provide to a lender since they help solidify your status as a responsible lender.
By referencing the tips in this article, you can easily provide all the banking history your lender needs to continue with your mortgage application.
Feeling overwhelmed by all the documentation you have to provide with you mortgage application? eChoice’s award-winning brokers can help make applying for a mortgage as streamlined and stress-free as possible.
Words by Emma Norris, Michelle Elias and Kathryn Lee