Boxes packed; 72 hours from closing.  First time buyer is excited and seller is moving up to a bigger home in a location they love.  Poof!  Both deals dead over bounced checks.  We represented the seller, not the buyer.  We’d never represent both sides of the transaction as we do not do dual agency transactions.

Everyone is pretty much aware that your credit score is the initial loan qualifier for a mortgage.  A score of 740 qualifies you for the best rates and as it drops, your rates go up and then at a point you are cut off.  Debt-to-income is another factor.  You’ll supply your taxes and bank statements (and anything else they ask for).  Your mortgage broker will guide you through the process.

For one reason or another a pattern of bounced checks had not been flagged until the final review of the file.  Even though the buyer had been pre-approved through automated underwriting, a borderline debt-to-income ratio triggered a complete review of the file and moved it to manual underwriting. The underwriter said that the Not Sufficient Funds (NSF) checks were the deal killer.

In hindsight someone on the lending side might have caught this earlier but they didn’t so all we can do is learn and be reminded that even though NSF checks don’t hit your credit, they can torpedo your ability to get a mortgage.