Home Buying in 55413>Question Details

Chrismanda1, Home Buyer in Conroe, TX

we make 4200/mo and spend most of that. we do get 1 or 2 overdraft fees every mo, but no bounced checks, will this affect us getting fha loan?

Asked by Chrismanda1, Conroe, TX Tue May 3, 2011

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I think most of us have had that "come to Jesus meeting" with our spending habits at one point in our lives! LOL! Good for you to acknowledge that and better yet, that you are willing to make changes. Homeownership is a WONDERFUL thing, but we never want you to become a statistic.

With regard to your bank statements, just make sure that from this point forward, you have no overdraft fees. Only two months of bank statements will be needed, so start now and you should be good. Your loan officer can also help with a letter of explanation if that is needed by the underwriter if an overdraft fee does show up. You just don't want several of them.

A higher interest rate doesn't apply. You may be thinking of the "old days" when subprime loans were around. Those are non-existent.
1 vote Thank Flag Link Tue May 3, 2011
For an accurate answer, consult with any qualified loan officer....
1 vote Thank Flag Link Tue May 3, 2011
Although the overdrafts will need to be explained, if your credit scores and other qualifying characteristics support an automated approval, there could be a way to get your file approved. Obviously, your chances are much better if there are no overdraft charges on the bank statements in question. I would recommend that you start today taking care to avoid overdrafts on your May bank statement. If you were to go out and find a home today, you would not be able to close until June anyway and we typically need just one bank statement for underwriting purposes.

If you don’t have the ability to make the concerted effort to eliminate the overdrafts, I might recommend that you take some time to shore up your financial position before purchasing a home. I would be more than happy to give you some guidance toward that end.

Peter Boyle 612 701 6816
0 votes Thank Flag Link Tue May 3, 2011
well thank you all for your help and wow fast too!
0 votes Thank Flag Link Tue May 3, 2011
This question is definitely better suited for a mortgage banker. I do think that it would affect you because the lender will look for any pattern of late payments/bounced checks. Do you have a down-payment that you have saved for a home?

Another side of this you should look at is that you shouldn't put every dollar you have into buying a home. There are unexpected costs that will come up as part of being a homeowner (i.e. furnace breaking, water damage, appliances breaking.) Now hopefully you won't have to deal with big issues like this but smaller issues probably will come up and if you are not prepared for it you probably won't be in a very comfortable situation.

If you're not truly prepared to buy a home it will come back to bite you in the butt.

Either way, good luck!
0 votes Thank Flag Link Tue May 3, 2011
and cant they just give us a higher interest rate?
0 votes Thank Flag Link Tue May 3, 2011
ive broken down my statements and i have about 2000 extra a month that im just spending on stupid things. so i can definitely afford a home, i just need a serious come to jesus meeting with my habits : / i hope they notice that i pay all of my bills first and have never had a bounced check. also ive been at the same job for 10yrs, my husband at his for 5. and we've got the 3.5% down. the only debt we have is 9,000 left on a car loan...which also has always been paid on time.
0 votes Thank Flag Link Tue May 3, 2011
Unfortunately, it does not matter if you are buying a $50,000 home or a $500,000 home....a pattern of overdraft fees can be an indication of late pays.

Please make sure that you are well prepared for home ownership. I am concerned that you are already spending most of the money that you make. When owning a home, you will have several other additional, monthly expenses that you may not have as a renter. Examples would be: trash, water, sewer, electricity, gas, cable/satellite TV, etc. Those costs are above and beyond your monthly mortgage payment. Analyze your spending habits and prepare a budget. Please make sure that you are in a position and have the ability to cover the additional expenses of owning a home. Talking to a loan officer can also help in determining that ability.

Best wishes to you!
Web Reference: http://www.sherrisherpy.com
0 votes Thank Flag Link Tue May 3, 2011
my lease is up june 26th. can i go ahead and get pre qualified and then watch my spending until mid june and then go for the pre approval where they actually check my statements?
0 votes Thank Flag Link Tue May 3, 2011
I agree that it will best suit you to consult a loan officer (like Bell Mortgage). They can do an analysis of your financials that will give you an accurate depiction of what you could be approved for. Best of luck in home buying!
0 votes Thank Flag Link Tue May 3, 2011
even if we're only trying to buy a house thats 112,000? we've never had a problem paying our rent or any bills.
0 votes Thank Flag Link Tue May 3, 2011
I believe it will affect you getting an FHA loan, they review your bank statements and seeing overdrafts is not looked as a good sign. Check with a loan officer but I think you will have to watch your spending for a few months so that you have some clean bank statements.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Tue May 3, 2011
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