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!
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