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I plan to apply for a 30-yeah mortgage soon, so I have been extra careful about deposits/withdrawals from my bank account. However, I did make a trip overseas and made an ATM withdrawal for about $180. Would this be flagged for potential concern, considering it's a foreign transaction?
Believe it or not, withdrawals aren't given a second glance. It's the deposits that are under the microscope. The other items to think about are unreimbursed employment expenses and increased credit balances. These items have become such a hotspot, I created an email template that goes out to my prospective buyers very early in our contact with hopes if it's early enough in the process, some major errors can be avoided.......I'm seeing improvements and it makes a huge difference if they get this email before the application process starts and they have 1000 forms thrown at them. Here's an excerpt:
Credit cards. While shopping for a home, it’s very important to keep your credit cards paid on time and restrain from any large purchases. Please avoid letting anyone run your credit while you are shopping for a home and please do not close any revolving accounts. This can actually lower your score, even as much as a late payment could. About 72 to 48 hours prior to closing, a soft-pull (meaning it won’t show or hurt your credit score) report is done. This will tell us if there have been any new accounts opened, any inquiries for new credit, and any increased balances. Substantial increases mean another trip back into underwriting. Non payroll deposits. If your bank statements have “counter deposits” listed, we will be required to show the source of those funds. In many cases, it could be a payroll check that doesn’t have automatic deposit. Or, it could be an insurance reimbursement check, bonus check or the sale of an item. We go back 2 months on the statements, in some cases further (we really try to avoid this), but every file is different. The best way to handle deposits that are not already identified as payroll is to make sure you deposit the full check (so the check stub matches the deposit). If there is no check stub or tear off description, please make a copy of the deposit before making the deposit. Please do not deposit any gift funds without specific documentation with me and call me should someone give you cash. Why all this bother? All loan types require we verify the funds as rightfully belonging to you. Unreimbursed employment expenses. If you claim unreimbursed employment expenses on your tax returns (Schedule A, line 21 or Form 2106), it is imperative you share this information with me. Most loan programs require us to pull IRS transcripts to check for these expenses, which lower your qualifying income. (We have portfolio programs, as well as, USDA which do not require tax returns unless someone is self-employed or receives commission income).
Not sure if this helps anyone, but I know it's better than hindsight.
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