Offer Accepted. Worried about Overdrafts

KateS · ‎01-16-2015

We just had our offer accepted on what we'd like to be our first home purchase. We were pre approved for for an FHA loan of 150k but went for a house significantly less, at 97500 with 3k towards closing. My wife is the one we are applying for, as I am newly self employed. Her lowest score is 720 and her others are higher (can't recall those numbers offhand). She has solid income and work history. She does have 2 old judgements that the Loan Officer said wouldn't be a problem, as long as we pay them at closing.

Pulling the bank statements, I didn't realize that the YTD overdrafts would show in that format, which total 175- however $70 was just refunded to us so I am assuming that will show in the next statement that comes out on Monday? One was in the beginning of November (one day prior and it wouldn't be showing on the statement) which was an accounting error on my part. Two of them were in the first couple days of December at the same time. She was working 16 hour shifts in a state of emergency (she's in law enforcement) and we just kind of lost track of pay day/checks going out in all the chaos. Stupid, I know. The other couple were last January. We've sine signed up for daily balance emails and alerts if our account falls below a certain point. I also rearranged by pay schedule to work better with

We have a call into the Loan Officer but he's off this weekend. Could this ruin our chances? I've read through so many overdraft threads on here but the situations seems to be varied.

Thanks for any wisdom!

StartingOver10 · ‎01-17-2015

Although $175 in overdraft charges in 12 months is not ideal it is not a deal breaker. You most likely will have to explain the errors in your account that lead to the overdrafts and your subsequent correction of the issue.

Note: consider using a register for your debits and credits. It will keep ODs from occurring as your entry is made simultaneously with the transaction. If you rely on alerts, there is a lag time as the transaction has already hit your account to generate the alert.

Anonymous · ‎01-17-2015

I just went through this a while ago when we applied for our Mortgage Yes, they will ask you about it. Just be prepared to explain why.

KateS · ‎01-17-2015

Thanks StartingOver10- I will look into doing that. We were using YNAB and putting transactions into the app at time of purchase last year and it was actually helpful.

Alpha480v- Were you still approved? How much did you have ytd/how many total?

Anonymous · ‎01-18-2015

I was still approved. We are closing at 10am on 1/23. Hopefully no zombie debt will appear out of nowhere between now and then.

My overdraft was only $30.00. I transferred over money as soon as I found out about it. It was in the account where I told my bank the down payment funds were going to be deposited. They needed a printout showing the down payment money in there and they saw and asked about the overdraft.

KateS · ‎01-19-2015

So I heard back from my LO/Mortgage Banker today and he said "no need to worry about it." We're meeting on Friday to fill out some additional paperwork. So... hoping he knows what he is talking about.

DallasLoanGuy · ‎01-20-2015

KateS wrote: She was working 16 hour shifts in a state of emergency (she's in law enforcement) and we just kind of lost track of pay day/checks going out in all the chaos. Stupid, I know. The other couple were last January.

I would push this deal till the cows come home..... I can see this happening to everyone.

To be clear. We would ask for last 2 months statements.... not ytd..... how many overdrafts on just that?

Retired Lender

Anonymous · ‎01-20-2015

This is something we have to be careful we cannot do any transaction until 90 days of the overdraft have passed, very careful on that.

StartingOver10 · ‎01-20-2015

@Anonymous wrote:
This is something we have to be careful we cannot do any transaction until 90 days of the overdraft have passed, very careful on that.

^^^This sounds like a lender overlay.