Deadly Overdraft Charges; 5% Down to $625,500

We had an underwriter deny a loan request recently b/c the borrower had so many overdraft charges on her bank statements. We had to provide multiple statements to verify rent, and there were overdrafts on almost every one of them even though the borrower’s debt ratios were relatively low.

Most people don’t realize that repeated overdraft charges adversely impact a borrower’s profile as much as derogatory credit. We screen statements for overdraft charges, and keep them out of the file when we can. But sometimes, we are forced to show them.

One more reminder: Conventional Borrowers can now purchase properties with only 5% down up to a $625,500 loan amount. Prior to December of last year, conventional borrowers needed 10% down if their loan amount exceeded $417,000.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646