We run a tight ship and have built many good relationships with lenders in the real estate industry. Fortunately, when working transactions with the reputable lenders we are accustomed to working with, we know that as long as our clients have “disclosed” to the best of their ability and have turned in documents requested by the lender, we have confidence that our transactions will close as planned.
Working with a first time home buyer recently, we had a “hiccup” in the week before scheduled closing. The buyer had turned in all the requested documentation which satisfied the lender. She followed the loan officer’s request to NOT change her financial status in any way, take out any new credit cards, buy a new car or quit her job before closing on her home. The documentation she presented passed all the preliminary scrutiny by the loan officer. We continued to proceed with the home buying process. Home inspections were done, water and well were tested and both parties had prepared for their respective move. All thing were going according to plan until the file was flagged in underwriting!
Problem: Due to an excessive number of overdraft fees on the previous month’s bank statement prior to being pre-approved for the loan. Although this buyer was well able to manage the loan amount, she had created a false sense of security with overdraft protection! She wasn’t worried about being overdrawn since she knew she had overdraft protection. A few overdraft fees in the past 60 days were nearly enough to be considered too much of a credit risk by the lender. After a couple of anxiety ridden days for the buyer, a successful solution was found, thanks to the top-notched lending team we were working with! She will soon be a homeowner but the possible ulcer could have been avoided with simply a bit of attention to overdrafts.