How Underwriters View Overdrafts In Bank Statements

Overdrafts in bank statements is not allowed by most mortgage lenders.  If you have overdrafts in bank statements in the past 12 months, you need to analyze how many overdrafts in bank statements you have and see if you had any overdrafts in bank statements in the past 60 days.  Overdrafts in bank statements is seriously frowned upon by mortgage lenders because it shows that you cannot manage your money in their eyes.  I know of countless of business owners who are willing to pay the $35 dollar overdraft fees and the bank honor their checks and will make the necessary funds to cover the overdraft the next day or two.  However, that is not how mortgage lenders look at it.  Mortgage lenders consider even a $5 dollar overdraft as serious. There are only a few mortgage lenders in the mortgage industry that will allow overdrafts in bank statements but there needs to be a good letter of explanation for it.  If you have one or two overdrafts in bank statements, it will not be a problem but if you habitually have overdrafts in bank statements month after month, the chances of you getting a mortgage loan approval is most likely zero.

Overdrafts In Bank Statements: Solutions

If you did not have overdrafts in bank statements in the past 12 months but had overdrafts in bank statements prior to the 12 months, then you have nothing to worry about.  However, if you provide your mortgage lender you most 60 days of actual bank statements and you did not have any overdrafts in the past 60 days, your mortgage loan underwriter will find out whether or not you had overdrafts in bank statements in the past 12 months?  How?  Well, there is a column on your actual bank statements that state the year-to-date overdraft fees and this section sticks out like a sore thumb to mortgage loan underwriters.

60 Days Of Bank Printouts

There is a solution to avoiding being asked or show that you had overdrafts in bank statements in the past 12 months.  It is not a trick and it is not fraud.  It is a case of don’t ask, don’t tell. All the mortgage lender wants to see is 60 days bank statements. Well, if you had prior overdrafts in bank statements the past 12 months but not in the past 60 days and you provide your mortgage lender 60 days of actual bank statements, you are telling on yourself that you had prior overdrafts since there is a column that shows year-to-date overdraft fees on it.  However, bank printouts are allowed in lieu of actual bank statements.  Most bank statement printouts do not show year-to-date overdraft fees.  You can get bank statement printouts by visiting your bank and asking the teller for a 60 day bank statement printout and have them sign, stamp, and date every single page of the 60 days of the bank statement printouts.  If you notice, you will not see a column of year-to-date overdraft fees.  Your mortgage loan underwriter will take the bank statement printouts in lieu of your actual bank statements.

Gustan Cho

www.gustancho.com

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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