Worried about my checking account review in underwriting - anyone dealt with this?
I recently started the home buying process and I’m a little anxious about the underwriting review of my last 2 months of bank statements.
Context: I sold my previous home and used part of the proceeds to pay off ~$25k in old credit card debt and other miscellaneous expenses. That created some large deposits and withdrawals in my main checking account. I believe an overdraft may have been posted. The remaining proceeds are sitting in a separate savings account with a solid balance, so I’m not actually low on funds, it just doesn’t look that way on paper for my checking account. In essence, my checking account (where my paystubs get deposited) ran really low the last 2 months due to paying off debt, moving expenses, bills, etc.
Otherwise my numbers are strong: good credit score, income more than comfortably supports the loan, DTI well under 30% (I am now completely debt free). I know underwriters like to see “clean” statements, but waiting another 2 months to sort out this account wasn’t really an option. I already waited a year for the right listing, and homes in this neighborhood move fast. Waiting longer risked losing the house entirely.
Has anyone gone through something similar? Is this likely to be a hard disqualifier, or is it something a letter of explanation (LOE) and proof of the other account can resolve? Any tips for how to present this to the lender proactively would be appreciated.