Hww can NSF fees on a bank statement impact my ability to get a loan?

It does look bad, ultimately - especially at first glance. With a good letter of explanation and verification that you in fact were not "out of funds" you should be fine to proceed. It would be helpful if your institution would not charge fees for overdraft protection - that seems a little hoakie and defeats the purpose does it not? :c)

A NSF on your account in and of itself is not a deal killer... But it goes to the overall picture. Simply put, if you are bouncing checks, it puts into doubt your ability to repay.

It can impact your ability to get approved if fees were incurred, but since the funds are pulled from your savings, then you will probably need to provide a letter of explanation and maybe even a letter from your bank explaining this.. When lenders see NSF fees, they think you are mishandling your finances and this will reflect poorly, and depending on the severity, will cause the lender to ultimately deny your loan. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

There are differences to NSF fees and a negative account balance. 99% of us have a savings that will allow overdraft protection and this is a simple explanation. Consistent overdraft because the money is not there period shows the underwriter that you are "not responsible, or can not afford" the mortgage.Just make sure that your statements do not show negative balances and your loan officer should catch this before submitting your file as well.

If the overdraft fees are pulled from your savings you should be okay. You will need to provide a signed, dated explanation letter that lets the underwriter know exactly what happened, how you have corrected it and why it won't happen again. Best wishes, Sean

Lenders do look at NSFs but a letter of explanation could clear up some of it. Another way to minimize your risk is if you work with a mortgage broker and ask for a FREDDIE MAC loan then the underwriting results will more than likely only ask for one month bank statements. That way you can wait till you have a clean month of bank statements and not have any NSFs. FANNIE MAE and FHA will typically require 2 months bank statements. Also if you have enough assets to be used in your transaction that is in your savings were it sounds like you have no NSFs then you can possibly use just your savings. BUT if you have any transfers from checking (where the NSFs may reside) going into your savings then the underwriter will request a copy of the checking in order to source the transfers. Definitely go thru all of this with a licensed mortgage broker in Iowa.