ACCOUNTS, OVERDRAFTS, AND LOANS ...

[shawneet]

Hello all ... I have a question that I'm hoping someone can provide some sound advice on (I have confidence in you guys   Anyway, when my hubby and I applied for our loan, we had given the LO copies of his bank statements, mine, as well as our joint savings account (which, btw, is where we have our "house money"... we do nothing with that acct except for make deposits toward our home).  So, my question is, do we need to show our INDIVIDUAL checking account statements because all the money that we will be using for our home is documented with the savings account.  I'm a little concerned because I've been reading that it's possible to have your loan denied because of ODs on your accounts and both my hubby and I have had this on our individual accounts but we have OD protection, which does not pull from our savings account.  Can't we just give statements for the savings account, which is really the important one because that's where the funds are deposited.  We will of course supply pay stubs for our income when they need documentation closer to closing.  Any advice is appreciated.  Btw ... Just in case, I'm trying to ensure that there aren't any further ODs before she will need statements again which will probably be in late July early August ... trying to at least keep these next few months OD free!

[foofighter74]

I'm pretty sure they're going to want to see statements for the accounts where bills are paid - as well as where your paychecks or direct deposits hit.  They need to verify that you don't have any undisclosed debts. And of course, NSF fees are something they'll look for.  How many are there?

So, I think the answer is yes, they'll need to see the individual statements as well as the savings account.  In some cases, if you have savings accounts, 401k, etc, that you DON'T need to qualify for the loan, you don't need to disclose those assets, but I can't imagine any scenario where your primary checking accounts won't be scrutinized. 

[shawneet]

Thanks, foofighter ... that's pretty much what I thought.  I'll just have to keep a tighter grip on the checking account so that there aren't any other ODs.  I hate the fact that they have to go over your statements with a fine tooth comb ... I may not want them to see how many times I went to KFC or purchased something from Amazon ... LOL  Geez, it's just so intrusive. But hey, I guess that's just something that I'll have to endure ... after all, I'm only asking for 275K of their money! LOL   I'll keep everyone posted on our progress.  So far, we haven't gotten any word back from the LO (which we probably won't for a minute because we're hoping that she will hold the FHA app for as long as possible - our 12 months on the mtg late isn't until July - so actually off in Aug) but we did get an email from the builder that in about 2 weeks or so, we should be setting up our pre-construction meeting.  We drove by the lot yesterday and we see that they have put down the stakes to mark the property lines, etc.  So, looks like things are about to get rolling ... excellent ... even though we have no commitment yet! LOL (but I'm trusting and praying that all will work out fine for us) Fingers and eyes crossed!

[foofighter74]

My wife was thrilled when i told her that they don't really care how often she goes to starbucks and uses her debit card - unless she was going to spend ALL our money there. lol

How many overdrafts were there in the last year between the two statements? LOE's may be all it takes to get beyond those items.

Usually a builder doesn't get the permits, stake the property, and make plans to set up preconstruction meetings without a fairly solid lender commitment...so obviously nothing has caused an issue thus far. 

[shawneet]

LOL! That's too funny!  They will probably think my statement is a local fast food restaurant lisitng! LOL  Hey, I'm trying to cut down on how much I go out to eat at lunch ... that would actually save me some $$ ... Well, the lender is the builder's "preferred" lender, so perhaps after she took all of our initial information and ran the numbers, we looked promising enough that she felt confident in giving them the "go ahead".  Of course, we've heard nothing of the sort.  We're just kinda sitting and waiting ... I know since we're looking at nothing really happening as far as our credit clearing up until July and actually being able to submit an app to underwriting until then, we're probably not anywhere near priority on our LO's list ... but for the builder to have sent our contract to processing and scheduling a pre-construction meeting, something (or someONE) must be working in our favor.   Well, I think that to date, I've had about 4 ODs on my account ... but they were for very small amounts and I immediately put the funds in the account.  Now, by the time she asks for our most recent 2 months of bank statements, I may have one OD showing on there.  Now, if they look at the YTD ODs, I hope that won't be an issue.  Otherwise, we're good ... like I said, I know that (I) sometimes spend $$ on lunch that I shouldn't but it absolutely does not interfere with me putting my savings aside for the house (in the savings acct.)  Our LO is pretty good ... maybe she will ask for VOD for our accounts instead ... who knows... I'm probably asking a bit much there! LOL

[foofighter74]

If you can show that you had the money in savings, you just "forgot" to put it into checking to cover the debits...they should be less of a problem.  It's one thing to have money available but not in the right account.  It's another thing to not have money available to pay bills until pay day, which would obviously be viewed much harsher.

Either way, they won't be viewed favorably but they do understand that people are human and make mistakes. 

[shawneet]

Do you think that they will care more about the ODs on the most recent statements that they will request or ODs that have occurred for the entire year? Obviously, those ODs will be a year or more old when they get my most recent statements ... which (Lord willing) will only show 1 OD, if that ...

[foofighter74]

Well, how many are we talking about in the last year, and what was the cause of them?

[shawneet]

I think there were a total of 4 and one was reversed by the bank because a deposit was made at the same time that a charge was coming thru and they posted the charge before my deposit (banks always do that ... BOA ... lol) ... but they all came about either because I withdrew cash and didn't account for something that was coming thru (like previous gas or something small like that) or a deposit was coming thru when a charge also hit.  I have been trying lately to use cash instead of my debit card for things so that I won't run into this ...

[fabadvice]

They may make an exception for you if they see you have savings money.

 I have a letter from the lender I  got pre-approved with and on the list of Do's and Don'ts it says don't overdraft checking/savings accounts. Lenders see overdrafts as a sign of bad money management which in turn can influence the loan approval. 

I think if you have not had an overdraft in a long time you should be okay. ( They can see you have money in your savings account so it's not like you don't have any money in your accounts.)