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NAVchek usage before mortgage app

Valued Member

NAVchek usage before mortgage app

Is using the Navchek LOC considered as overdrafts for underwriters? I have used it and kept it a small balance. Mainly because I didn't count it as overdrafting. Will the lender see it that way? I want to apply in a few months and will not use it until I apply. Is this gonna stop me from getting a home loan?

Starting Scores: TU - 577, EQ - 636, pulled on 01/10/12
Current Scores: TU - 679 (02/21/13) EQ - 663 (02/23/13)
Goal Score: Mid-score of 680 by June 2013
Message 1 of 4
Valued Contributor

Re: NAVchek usage before mortgage app

There have been some members here that have been denied because the underwriter considered overdraft protection usage as a bounced check. You will want to have detail bank statements along with a statement showing your overdraft LOC as well as a detailed explanation on why you had to use it. Depending on how old the last usage was, it may not count, but I would definitely pay the balance off before you apply.
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Message 2 of 4
Valued Contributor

Re: NAVchek usage before mortgage app

This came up for me as I was working to qualify through NACA.  I wrote a letter of explanation stating that I believed this was a normal facility offered by the bank but would stop allowing overdrafts.  Basically they considered any covering of overdrafts from Navchek an overdraft.  I just deposited Navcheks into my USAA account if I needed to draw funds.  Now for NACA you submit bank statements every month, another lender may just look at a lst two or three.


I'd say stop triggering automatic draws now.  If you get questioned an LOE should handle it, strengthened by the demonstrated period without covering draws.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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Established Contributor

Re: NAVchek usage before mortgage app

This a very good question.

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Starting Score: 492-TU04, 480-EX FICO V2, 467-EQ Beacon 5 (Via Mortgage PreQual March '12)
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