bank statements needed for mortgage -- do they need to see every transaction?

[Sk323i]

I overdrafted because the auto-pay on my credit card payment got incorrectly set to pay full balance - by a representaive from the credit card company. It was immediately disputed by me, but because it fell on the last day of my statement it shows an over draft. The money was credited back to my account a day later and I later payed my credit card bill on time, but for the correct budgeted amount. I

I budget my funds very closely. I assume there are people like me living paycheck to paycheck. My checking account balances out to 0 usually the week before payday. 

I have a savings account that fluctuates between 100-1800 dollars throughout the month -- depending on unexpected things like car maitenance, medical bills, required personal travel, school, etc. 

I have rented before, in downtown Los Angeles where my rent was $2300 - ( 2 x what my monthly mortgage payment would be). I was ontime with payment every month for 2 years. 

Is there something that I can bring -- Like my lease agreement from that apartment? Should I email that property manager and ask for a letter stating i was never late, and a good tennant? Is that normal or needed?

I pay my parents rather informally. We dont have a signed agreement, or a set amount. It usually varies between 500 - 1000 bucks a month. Is this something i should draft an agreement for ? -- and retroactively date and execute it? To date, for the last 6 months, payments have been made in the form of cash and/or electronic transfers between her checking account and mine. 

The mortgage payment would be approx $1175

200K house, at 4% for 30 years with 15K down. 

My FICO 8 score is 640. I expect it to be higher now, as I just payed my util down 20 last week. 

My current util is 54% and I have 5100 of credit debt on 5 trade lines, 50% of which I have had for more than 1 year.

0 installment or auto loans

I did have charged off credit of about 5K across 4 accounts, all of which were settled in full, over 3 years ago. Late payments and derogs -- but all from over 5 or 6 years ago now. I have been rebuilding slowly since. 

My debt to income ratio is 43%

I'm going to apply for the loan on Friday in person. I will have $100 in my checking account. I will have $1700 in my savings. I will have $600 combined across 3 different investment accounts. I own 1 asset, my car - only worth 2K. The bank statement from 2 months ago does show that overdraft that was later refunded. 

Should I expect that I would be denied? Is it not a pass/fail thing? Do I have to state that I want a loan for 200K? Do they run my profile and then let me know what they can offer?

Thanks for any feedback! It's so apprecaited. I know it's alot. I'm in need to move for school by Jan, and dont want to waste on rent if I can buy

Should I bring a letter from my parents indicating they will be providing me with a gift of ~$15K?

[Anonymous]

Have you run some basic mortgage calculators to see if you can realistically afford a mortgage of 200,000 plus taxes and insurance?

A overdraft is not neccesarily a deal killer but must have positive compensators (good credit, extra cash, long employment history, etc).

7000 and all money to bills every month with nothing left over sounds stretched. What is your current rent obligation? Will the new mortgage be higher or lower than what your currently paying?

It is not always yes or no, it could be maybe with xyz cleared up or it could be yes but not the full amount you desire or it could be yes but you need more money or it could be yes "go shopping!".

[Anonymous]

You state the 15000.00 will be down payment, what about closing costs? Prepaids? Those are 3-5% of the asking price typically but it is dependant upon your lender and your prepaids to some extent.

[Anonymous]

Retroactively dating and signing documents is fraud and not suggested also not likely to hold much weight since it is your parents.

[Anonymous]

You REALLY need to talk to a loan officer, because we have no way of sensing for sure what the lender will say. This is not pass or fail, this is ACCEPT, REFER (manual underwrite) or REFER WITH CAUTION (deny). With what you have said so far, I would *guess* you would get sent to manual underwriting or be asked to make some changes to your profile to get an ACCEPT.

The mortgage process starts with a systemic entry of all data provided to the loan officer into an AUS - Automated Underwriting System. The AUS examines your profile and assigns a risk to it.

    a. ACCEPT/ELIGIBLE means that you are considered a good risk, if all information entered was 100% accurate. An underwriter will review the file for accuracy against documentation submitted, request more informationand then will approve the file or deny it based on looser guidelines. These guidelines include no required verification of rental history, for FHA expanded DTI allowances to 56.99%, and no submission of tax returns

    b. REFER/ELIGIBLE means that you are considered risky, or there is not enough information in your file to determine risk accurately. For some lenders this is a deny, for others, you can get manually underwritten. Manual underwriting has much tighter guidelines than if you had received an ACCEPT. For example, manually underwritten files may need full rent verification, lower DTI ratios, line by line validation of tax returns for the last 3 years and higher reserves (savings)

    c. REFER w/ CAUTION means that you are beyond the risk for the mortgage being sold to investors, and you will not receive any sort of Federal insurance or guarantee on your loan, which is a denial for most lenders (if not all)

1. You rent from your parents, at an unset amount, but you are going to take on a mortgage for more than what you are paying now. When it comes to a loan, you need a stable rental history of paying on time, in full. Also, it's your parents, and cash transactions don't count for anything. It has to be documented. I would get a lease, and start paying by check in full immediately.

2. You are living paycheck to paycheck. Yes, we all live paycheck to paycheck at some point in our lives, but this is not what mortgage lenders want to see when funding a home purchase. You are one snafu from not being able to pay back your obligations on time. This is especially true when you are INCREASING your costs of living, not decreasing. Treat your savings as savings, not another checking account.

3. Your DTI is 43%. Too high. Pay some of it (or all of it) down. Better yet, talk to your loan officer about what they suggest as the best course of action. Your DTI calculations may be high or low.

4. The gift letter - the lender will get this themselves. Just put the gift on your application, it will ask.

5. Your previous rental - the bank will get this themselves. No verifications can come from you directly. The lender will pretty much always go to the source - credit reports, directly to the property management company with their own forms, validation of bank statements, etc.

I don't say any of this to be discouraging, but to show you what you are dealing with. I really think that if you buckled down, saved a little, got a lease with your parents, switched to paying by check, and letting some baddies age off your profile, you would be in great shape in a year.