What You Need to Know About Statements and Transaction Histories
Applying for a home loan can be a drawn-out process. It often requires many types of documents, including statements and transaction histories. Here’s what you need to know about these documents.
Why Your Home Loan Provider Wants Statements and Transaction Histories
Your home loan provider wants to study all your financial transactions. This helps them determine whether you can meet regular monthly mortgage repayments.
Both documents show all the transactions in and out of your account over a period of time. These include:
• Regular payments
• Day-to-day spending
• Loan repayments
• Other important transaction patterns
You must submit bank statements and transaction histories with your mortgage application. It helps loan providers determine your borrowing power.
Transaction Histories and Statements – Differences
A bank statement shows monthly transactions. Transaction histories cover a chosen period. Generally, transaction histories show the most recent transactions.
Each month, the bank sends you a statement, either by post or by email. Transaction histories are available online. By logging into your account on the bank’s website, you can view your transaction history and print it out.
Both documents allow home loan providers to scrutinise your income. It also helps them understand your spending patterns.
Banks request both documents because they provide complementary information. A transaction history does not show your full details. A statement does, but it may not cover recent transactions.
What Your Bank Statement and Transaction Histories Must Show
Home loan providers want to see original documents or easily-verifiable documents. These must show:
• Your name and address
• Name and address of the bank
• Account number
• Opening and closing balance
• Bank logo
• All the transactions for the relevant period
This information helps them determine whether your documents are valid. Double-check your documents before sending them on to speed up the reviewing process.
Note that banks will not accept exported data. You may not be able to generate a valid CSV file through your home banking app.
That said, many internet banking apps can generate valid statements and transaction histories. If your app cannot do that, you may have to go to the bank and ask for printed files.
Other Documents You May Need
When you apply for a mortgage, the bank may request other documents. It’s important to have all of them ready. It will help speed up your loan application process. These could include:
• Pay slips
• Loan statements
• Credit card statements
The aim is to form a complete picture of your financial status and run a serviceability test.
You must be willing to submit all financial documentation from all financial institutions.
Why You Need Both Statements and Transaction Histories
Bank statements show transactions over one to three months. Transaction histories include all the most recent transactions. The more information you submit, the faster a home loan provider can assess your finances.
When you want to buy a home, the amount of money you can borrow depends on your income-debt ratio. Banks cannot figure out this ratio without valid financial documents.
To get mortgage approval, gather all documentation before contacting your home loan provider. In this way you will avoid delays.
The information in this article is general in nature. Please seek advice from a licensed professional when making financial decisions.