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Hww can NSF fees on a bank statement impact my ability to get a loan?

So basically over the last several months I have had a few items showing as NSF. I have my bank account set up to pull from my savings, so there are no actual fees incurred...but wondered if this will look badly when I go to apply. by lindsay.g27372 from Woodward, Iowa. Sep 8th 2015 Reply


David Baker (David Baker)
#1 ranked lender in Iowa - 48 contributions

It does look bad, ultimately - especially at first glance. With a good letter of explanation and verification that you in fact were not "out of funds" you should be fine to proceed. It would be helpful if your institution would not charge fees for overdraft protection - that seems a little hoakie and defeats the purpose does it not? :c)

Sep 8th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,524 contributions

A NSF on your account in and of itself is not a deal killer... But it goes to the overall picture. Simply put, if you are bouncing checks, it puts into doubt your ability to repay.

Sep 9th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,933 contributions

It can impact your ability to get approved if fees were incurred, but since the funds are pulled from your savings, then you will probably need to provide a letter of explanation and maybe even a letter from your bank explaining this.. When lenders see NSF fees, they think you are mishandling your finances and this will reflect poorly, and depending on the severity, will cause the lender to ultimately deny your loan. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Sep 9th 2015
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Steffnie Parsons (Steffnie)
#14 ranked lender in Oklahoma - 61 contributions

There are differences to NSF fees and a negative account balance. 99% of us have a savings that will allow overdraft protection and this is a simple explanation. Consistent overdraft because the money is not there period shows the underwriter that you are "not responsible, or can not afford" the mortgage.Just make sure that your statements do not show negative balances and your loan officer should catch this before submitting your file as well.

Sep 10th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,107 contributions

If the overdraft fees are pulled from your savings you should be okay. You will need to provide a signed, dated explanation letter that lets the underwriter know exactly what happened, how you have corrected it and why it won't happen again. Best wishes, Sean

Sep 10th 2015
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Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 569 contributions

Lenders do look at NSFs but a letter of explanation could clear up some of it. Another way to minimize your risk is if you work with a mortgage broker and ask for a FREDDIE MAC loan then the underwriting results will more than likely only ask for one month bank statements. That way you can wait till you have a clean month of bank statements and not have any NSFs. FANNIE MAE and FHA will typically require 2 months bank statements. Also if you have enough assets to be used in your transaction that is in your savings were it sounds like you have no NSFs then you can possibly use just your savings. BUT if you have any transfers from checking (where the NSFs may reside) going into your savings then the underwriter will request a copy of the checking in order to source the transfers. Definitely go thru all of this with a licensed mortgage broker in Iowa.

Sep 10th 2015
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