Lenders use brokerage statements for a mortgage to confirm who owns the account, what the holdings are worth after any margin loan, and whether the funds are vested. Stocks, bonds and mutual funds usually count toward reserves at full value. For the down payment, the borrower may have to sell and show the proceeds landing in a bank account.
What do lenders look for on brokerage statements for a mortgage?
An underwriter reads a brokerage statement for four things: the account owner's name, the statement date, the market value of each position and any debt against the account. Those four facts decide whether the balance counts and how much of it. The transaction history matters less than it does on a checking statement.
The parts of the statement that matter
- Account holder and account type. An individual account, a joint account, a trust account and an employer plan are read differently. The borrower's name must be on it.
- Statement period. Many brokerages issue quarterly statements. Fannie Mae accepts the most recent monthly or quarterly statement for stocks and mutual funds, according to its Selling Guide topic on stocks, stock options, bonds and mutual funds.
- Holdings summary. The list of positions with their market value on the statement date.
- Margin balance. Any loan against the securities. Fannie Mae values the assets net of margin accounts, so a 100,000 portfolio with a 30,000 margin loan counts as 70,000.
- Cash or sweep balance. Uninvested cash in the account, often shown as a money market fund.
What gets less attention
Dividend reinvestments, small trades and fee lines rarely draw questions. A large deposit into the brokerage account is different. If the borrower moved 40,000 into the account last month, the underwriter will ask where it came from, just as they would on a bank statement.
Brokerage holdings that count and holdings that do not
Most publicly traded holdings on a brokerage statement count, because they have a market price and can be sold within days. Holdings that cannot be sold, priced or withdrawn are excluded or need extra documents. The test is whether the borrower could turn the position into cash for closing.
Holdings that usually count
- Listed stocks and exchange-traded funds, at market value on the statement date.
- Mutual funds, at the net asset value shown.
- Government bonds, which Fannie Mae values at purchase price unless the redemption value can be documented.
- Money market and sweep cash, at face value.
- Vested stock options, using a statement that lists the number of options and the option price. The usable figure is what the borrower would realize from exercising and selling.
Holdings that usually do not
- Non-vested stock options. Fannie Mae says they are not an acceptable source for the down payment, closing costs or reserves.
- Unvested restricted shares and any position the employer can still take back.
- Private placements and restricted securities with no market price.
- Cryptocurrency held at a brokerage. Many lenders want it sold and moved to a bank account first. Using crypto for a down payment covers the conversion and the paper trail.
- Shares held in a business's name. These belong to the company, not the borrower. The rules for using business funds for a down payment apply instead.
Why do some lenders discount stock balances on a brokerage statement?
A haircut is a discount a lender applies to a volatile asset so a market drop before closing does not leave the file short. Fannie Mae counts 100 percent of the value of stocks and funds for reserves. Some other programs and lender overlays count only part of the balance, so ask before you promise a figure.
Where haircuts show up
Haircuts are a lender and program choice, not a universal rule. You are most likely to meet them on:
- Non-QM and portfolio loans, where the lender writes its own asset rules.
- Asset depletion or asset-qualifier programs, where the balance becomes income.
- Retirement accounts at lenders that discount for taxes and early withdrawal penalties.
- Concentrated positions, such as most of a portfolio in one stock.
How a haircut changes the count
All figures are examples. A borrower has 120,000 in a brokerage account, all in stock funds. The file needs 45,000 of reserves.
| Lender rule (example) | Counted value | Enough for 45,000? |
|---|---|---|
| 100 percent of market value | 120,000 | Yes |
| 70 percent of market value | 84,000 | Yes |
| Net of an example 30,000 margin loan, then 60 percent | 54,000 | Yes, narrowly |
The point is not the exact percentage. It is that the same statement can support very different figures depending on whose guideline applies. Put the lender's rule in your notes before you run the numbers.
Vested balances on employer and retirement brokerage accounts
Only the vested part of an employer plan or retirement account counts toward a mortgage. Vested means the borrower owns it outright and keeps it if they leave the job. Fannie Mae accepts vested funds from IRAs, SEPs, Keoghs and 401(k) accounts for the down payment, closing costs and reserves.
The Fannie Mae Selling Guide topic on retirement accounts adds two conditions. The lender must verify ownership and confirm the account is vested. For 401(k) and similar plans, the account must allow withdrawals regardless of current employment status. Fannie Mae does not require the funds to be withdrawn when they are used only for reserves.
Reading the vested figure
Employer plan statements often show two numbers: the total balance and the vested balance. Use the vested one. If the statement shows only a total, ask the plan administrator for a statement or a letter that states the vested amount. A participant website screenshot is weaker evidence than a statement the plan itself issued.
Loans against the plan
A 401(k) loan reduces what is available and adds a repayment. The statement usually shows the outstanding loan balance. Subtract it from the vested figure, and check whether the lender counts the repayment in the debt-to-income ratio.
Equity compensation accounts
Shares from an employee stock plan often sit at a separate brokerage. Once they vest and are deposited in the borrower's name, they are ordinary stock and follow the rules above. Before vesting, they are a promise, not an asset.
Liquidating brokerage assets for closing: the 20 percent test
Fannie Mae uses a simple test to decide whether a borrower must sell securities and prove the cash arrived. If the stock or fund value is at least 20 percent more than the funds needed for the down payment and closing costs, proof of liquidation is not required. If the cushion is thinner, the borrower must document the sale.
The rule comes from the same Fannie Mae topic on stocks and mutual funds. It applies to the down payment and closing costs. For reserves, the guide says the full value may be counted and liquidation is not required.
Worked example: two files
All figures below are examples.
| File A | File B | |
|---|---|---|
| Funds needed for down payment and closing costs | 80,000 | 80,000 |
| Brokerage value net of margin | 110,000 | 90,000 |
| 120 percent of funds needed | 96,000 | 96,000 |
| Value at least 20 percent above need? | Yes | No |
| Proof of sale and receipt required? | No | Yes |
File A clears the test because 110,000 is above 96,000. The borrower still has to bring cash to closing, so the shares are sold at some point, but the lender does not need to see the sale in advance. File B falls short. The borrower sells enough to cover the need, and the lender wants the trade confirmation plus the bank statement showing the proceeds arrive.
Tracing the proceeds into the bank account
The brokerage-to-bank transfer is where the two statements meet. The underwriter matches the outgoing transfer on the brokerage statement to the incoming credit on the checking statement by date and amount. TrueBankFlow reads the checking side: it flags a large incoming credit with its date and statement line so you can attach the brokerage confirmation before the underwriter asks. It does not read the brokerage statement itself.
Timing the sale
Selling early locks in the value but can create a tax bill and takes the money out of the market. Selling late risks a price drop. Tell the borrower the file needs the proceeds in a bank account before closing, and let them choose the day with their own adviser.
Brokerage statement problems that stall a mortgage file
Most delays with brokerage statements come from documents that are incomplete, out of date or in the wrong name, not from the assets themselves. Each one adds a condition and a week. Catching them before submission is cheaper than answering them after.
Problems seen in files
- Missing pages. Brokerage statements are long, and borrowers send the summary page alone. Underwriters want every page, including the blank ones the brokerage numbers.
- Stale quarterly statements. A statement from three months ago may not reflect today's value. Ask whether the lender wants a current online printout to go with it.
- The wrong account owner. A parent's account, a spouse's sole account or a trust the borrower has no right to draw on all need extra paperwork or are excluded.
- Unexplained deposits into the brokerage account. These need sourcing like any other large deposit.
- Overlooked margin loans. A borrower who forgets the margin balance shows a value the lender will not count.
- Values that fell. In a falling market, a brokerage balance that covered the need at application may not at closing. Leave room.
Handling the statements safely
Brokerage statements carry full account numbers, holdings and sometimes tax identifiers. Keep them in the loan system, not in email threads, and share them only with people working on the file. If one is ever exposed, the duties that follow are set out in the guide to data breach notification for lenders.