Home Buying in Minnesota>Question Details

Katie, Home Buyer in Minnesota

wil overdrafts in my checking account get my financing rejected?

Asked by Katie, Minnesota Thu Mar 18, 2010

I have been preapproved for financing. I haven't been late on bills. And most of the overdrafts r due to the bank taking longer to process my deposits. What should I expect from the underwriter and how long does the underwriters process take? Before closing do you know for a fact your financed?

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Every underwriter is different and some may require that you explain the nature of the overdraft. Some loan programs are more strict then others, in this case the underwriters my strongly question the overdrafts, especially if they are consistent and not just a one time occurnence. This doesn't mean that you will not be able to get financing, just be prepared to explain the cause of the overdrafts. If you would like to sit down and discuss the underwriting process, please feel free to contact my team and I at 952-223-0900. Thanks!
1 vote Thank Flag Link Wed Apr 28, 2010
An underwriter could certainly question why you have the overdrafts especially if you are using FHA or VA financing.
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0 votes Thank Flag Link Thu Mar 18, 2010
There is nothing in the guidelines that say anything about overdrafts, and I have never seen it mentioned, although I alwasy cringe when someone gives me a bank statement with overdrafts. This could be an underwriters call based on the situation. If you are currently a renter, let's say, and you are going to have a similar payment for your mortgage, it would be different than if you lived at home and didn't pay rent, and now all of a sudden are going to have a big mortgage payment. Also, if you have money in savings they would overlook it more than if you didn't.
0 votes Thank Flag Link Thu Mar 18, 2010
Katie -

It could. You should document the reasons for any overdrafts so it can be provided to the underwriters should they question it.

Good Luck
0 votes Thank Flag Link Thu Mar 18, 2010
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