Buying a home is one of the most exciting milestones in life—but it’s also one of the most financially sensitive. While most buyers focus on credit scores and down payments, your bank account behavior can quietly make or break your mortgage approval. Here are some key pitfalls to avoid so your loan process stays smooth and stress-free.

1. Overdrafts Can Raise Red Flags

Even a single overdraft can trigger questions from underwriting. Lenders want to see financial stability, and frequent overdrafts may suggest poor money management—even if they’re accidental. If you’ve had one recently, be prepared to provide a written explanation.

2. Missing or Incomplete Bank Statements

Lenders typically require two full months of bank statements. Make sure your statements are complete, legible, and include all pages—even if the last page is blank. If your account rolls over into a new month before closing, you may be asked to provide the next statement as well.

3. Large or Unverified Deposits

Any deposit outside of your regular income—especially over $500—will need to be sourced. That means showing where the money came from (e.g., a gift letter, sale of an asset, or transfer from another account). Unverified funds can delay or derail your approval.

4. Using Multiple Accounts Without Clarification

If you’re using more than one account for closing funds, make sure your lender knows. Funds transferred between accounts must be documented, and joint accounts require a letter confirming access if both names aren’t on the loan.

5. Closing Accounts Mid-Process

Avoid closing any bank accounts during the loan process—even if you’re consolidating. Lenders need a clear picture of your financial activity, and sudden changes can complicate verification or trigger re-review.

6. Paying for Appraisal or Other Fees from Unverified Accounts

Appraisal fees and other out-of-pocket costs should come from accounts that have already been documented. Paying from an unverified account may require additional sourcing and delay your file.

Pro Tip: Keep It Simple and Transparent

The best approach is to keep your banking activity clean, consistent, and easy to explain. If you’re unsure whether a transaction might raise questions, ask your lender before making it. A little foresight can save a lot of time.

Final Thought: Your bank account tells a story—and during the homebuying process, it needs to be one of stability, clarity, and readiness. Avoiding these common pitfalls helps ensure your mortgage journey stays on track and gets you to the closing table with confidence.