Interesting, because I actually had a lender ask me for a paper trail on transfers between my own checking and savings accounts, which I thought was a bit much. Maybe it’s just luck of the draw on who you get, but I’ve noticed some underwriters are way more by-the-book than others. I get the compliance angle, but sometimes it feels like they’re just looking for red flags that aren’t really there. Has anyone else noticed it’s worse with online banks versus brick-and-mortar?
I actually had a lender ask me for a paper trail on transfers between my own checking and savings accounts, which I thought was a bit much.
That’s wild, but honestly, I’ve been there. Last time I refinanced, the underwriter wanted to see documentation for a $200 transfer between my accounts. I almost laughed, thinking, “You want proof I moved my own money to myself?” But I get it—after 2008, they’re all a little jumpy.
I’ve noticed what you mentioned about online banks, too. The one time I tried going with an online lender—figured it’d be faster, less paperwork, right? Wrong. They flagged every single transfer in and out of my savings, even the ones that were just me shuffling things around for budgeting. It felt like they wanted an essay on why I bought groceries at two different stores in the same week. With my local credit union, they asked for the usual stuff but didn’t grill me about every little thing.
It does seem like some underwriters are just wired for maximum caution. My theory is that with online banks, the folks reviewing your file don’t have that face-to-face connection, so they double down on the rules. Maybe they’re worried about missing something and getting in trouble. In-person, you can at least explain yourself and see if they’ll let something slide.
That said, I’d rather they be too careful than not careful enough. When I bought my first place, I was so green—I had no clue what half the paperwork even meant. If they hadn’t caught a weird deposit from a side gig and asked me about it, I might’ve run into tax headaches later. Still, there’s a fine line between due diligence and nitpicking.
Guess it’s just the new normal: trust no one, verify everything... even if it’s just you moving money from one pocket to another.
It felt like they wanted an essay on why I bought groceries at two different stores in the same week.
That made me laugh, because I’ve had almost the exact same experience. During my last mortgage application, they flagged a $150 transfer from my checking to savings and wanted a signed letter explaining it. I get the need for caution, but sometimes it feels like they’re just looking for reasons to slow things down. I do wonder if some of these policies are more about covering their own bases than actually preventing fraud.
Mortgage lenders do love their paperwork, don’t they? I’ve seen people get flagged for things as innocent as splitting a Costco run with a roommate—try explaining that in a “signed letter of explanation.” I mean,
—that’s a new level of nitpicking.“they flagged a $150 transfer from my checking to savings and wanted a signed letter explaining it”
To be fair, some of it really is about covering their own tails. Regulations are so strict that lenders would rather over-document than risk missing something. But sometimes, it feels like the process is designed to make you question your own spending habits. I once had a client get asked about a $30 Venmo to her sister. She joked she should’ve just paid her in quarters to avoid the paper trail.
Has anyone ever actually had an underwriter accept a simple, common-sense explanation? Or do they always want it notarized, triple-signed, and delivered by carrier pigeon?
Honestly, I’ve seen underwriters accept a quick, one-sentence explanation for stuff like that—no notary, no drama. It really depends on the lender and the mood of the underwriter that day. Sometimes they just want something on file to check the box. Other times, yeah, it feels like you need a blood sample and a sworn affidavit just to move $50. It’s wild.
