To handle bank transaction records for a home purchase, homebuyers must first document all transactions related to the purchase, including down payments, closing costs, earnest money deposits, and mortgage payments. They should retain canceled checks, bank statements, settlement statements, and loan agreements in both paper and digital formats. Organizing these records in chronological order or using financial software is recommended to ensure clarity during audits, tax filings, or disputes. Homebuyers should also verify that all transactions align with the purchase agreement and mortgage terms to avoid discrepancies.

This process is critical because proper documentation safeguards against financial disputes, ensures compliance with IRS requirements for deducting mortgage interest and property taxes, and streamlines loan underwriting. For example, the Internal Revenue Service (IRS) mandates that homeowners maintain records of mortgage-related payments exceeding $600 to claim tax deductions. A 2022 study by the National Association of Realtors found that 35% of homebuyers encountered delays or rejections due to incomplete or inaccurate transaction records, underscoring the need for meticulous documentation. Additionally, lenders like Fannie Mae and Freddie Mac require detailed transaction history to verify debt-to-income ratios and loan eligibility, as poor record-keeping can lead to underwriting delays of up to 20 days, according to Federal Housing Finance Agency data. By maintaining organized records, buyers mitigate legal risks, expedite transactions, and ensure transparency with tax and financial authorities.