MN First Time Buyers: Watch Out For NSF Fees

Mortgage and Lending with Guaranteed Rate NMLS #2611 NMLS ID # 389212

One of the most commonly overlooked items of credit for Minnesota first time buyers is the nasty overdraft fee resulting from an “NSF”…otherwise known as a bounced check.  These items do not show up on your credit report, but they do show up on a bank statement.

A mortgage underwriter will ask for a good explanation for the reason behind the NSF fee.  If it is an occasional problem, this might not impact them too much.  But if it’s a habit this may signal a credit problem to an underwriter.

Several banks now show the amount of NSF fees right on their bank statements as they accumulate throughout the year.  When a mortgage underwriter is reviewing a borrower’s credit package and sees a large amount of NSF fees this can effect their decision, especially if the borrower has other credit issues on the credit report.

If you’re planning on buying a home this year be sure to take good care of your checking account and avoid NSF fees!

Comments (1)

Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

NSF's definitely do have the potential to sideline a mortgage approval.  It all goes to financial management.

Mar 09, 2011 02:51 PM