To process a bank mortgage without transaction history, applicants must provide alternative documentation to verify income, assets, and creditworthiness. Lenders typically require pay stubs, tax returns, W-2 forms, or asset statements (e.g., bank statements, investment summaries) to establish financial stability. A credit report remains critical, as it reflects payment behavior even without recent transactions. If transaction history is unavailable, a detailed letter explaining the gap and providing supporting evidence (e.g., employment verification, rent receipts) may suffice. Cosigners with strong transaction histories can also strengthen the application. Underwriters will assess risk using these alternative methods, though approval depends on meeting debt-to-income ratios and collateral requirements.

Lenders rely on alternative data because traditional transaction history is often inaccessible for non-bank customers or those with limited banking relationships. The Federal Housing Finance Agency (FHFA) reports that 35% of mortgages in 2022 used non-traditional documentation, reflecting growing flexibility in underwriting. Fannie Mae’s guidelines permit alternative assets like retirement accounts or insurance policies, provided they offer verifiable value. The Consumer Financial Protection Bureau (CFPB) notes that 20% of U.S. adults lack credit scores, necessitating alternative proof of reliability. For example, utility payments, employment contracts, or rental agreements can substitute for bank transactions. However, stricter scrutiny applies, as the absence of transaction history increases default risk. Data from the Urban Institute shows that mortgages approved with alternative documentation have a 5-8% higher default rate than conventional loans, underscoring the trade-off between accessibility and risk. Lenders balance these factors by requiring thorough documentation and collateral coverage to mitigate losses.