Whether you’re applying for private financing or a long term solution from a bank, you’ll be asked to provide your fair share of documentation. A big part of that is making sure there are enough funds in your various accounts to cover a down payment along with various closing costs you’ll encounter along why lenders review bank statementsthe way. But banks look at statements for more than just to see if you have enough money, that’s easy enough. Your bank statements tell more about you than you might realize.

One of the tenants of mortgage lending is verifying sufficient funds to close. But it goes one step further—those funds need to belong to you. You can share the funds with a third party but you must be able to access such assets at will. Banks match up your income with bank statements. Say your employer pays you $3,000 take home on the 1st and 15th. Your bank statements should reflect those deposits. Banks will also look for non-regular deposits. And it’s quite possible any non-regular deposits can’t be used in the transaction. How can that be if the funds are in your bank account with your name on it?

Where did those funds come from? If not from a pay check, how did they arrive in your account? If you have a side business you can document the deposit with an invoice or copy of a cancelled check for the amount. A bank wants to make certain any funds in your account aren’t borrowed from someone else. If so, the monthly payments could affect your ability to pay. This can get trivial sometimes when a bank wants to know where $1,800 came from when you simply sold your snow mobile. Unless you can document the transaction, a bank may not count that $1,800 in your account. If it’s in your account, make sure you can validate the source.