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Mortgage  Question?
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Can NSF on Bank Statement Prevent Qualify for Mortgage?

Can a non-sufficient funds issue on your bank statements prevent you from qualifying for a mortgage? I had an NSF issue last month but I have plenty of funds in my account now.

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

If the non-sufficient funds (NSF) event only occurred once and you remedied the issue quickly, it should not be an issue when you apply for your mortgage. If you have multiple NSF indications on your bank account statements and the NSFs are related to an ongoing financial obligation such as making payments on a loan, then this can cause an issue when your mortgage application goes through the lender underwriting process.

While I do not think the NSF event you described will cause an issue, if you want to be cautious, then you can wait until the NSF item is not longer listed on your bank statements for the two months before you apply for a mortgage. If you want move forward with your mortgage sooner then your best approach is to be prepared in the event the lender brings up the issue. I recommend that you draft a letter that explains the NSF item and how you addressed the issue. I would note that you corrected the issue quickly, that it only occurred one time and note your current bank account balance. In the event that your lender asks about the NSF item, you can provide the letter to quickly address the issue. If lender does not inquire about the NSF item, there is no need to raise the issue or provide the letter.

Finally, we always recommend that you contact multiple lenders to understand how they would handle your unique situation. You can review lenders in your area by clicking INTEREST RATES We advise you to contact at least four lenders as qualification guidelines vary. Plus, shopping multiple lenders is the best way to save money on your mortgage.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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