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    • AdKM
    • By AdKM 11th Jul 17, 9:26 AM
    • 38Posts
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    AdKM
    Does a Business Account Overdraft Affect Mortgage Application?
    • #1
    • 11th Jul 17, 9:26 AM
    Does a Business Account Overdraft Affect Mortgage Application? 11th Jul 17 at 9:26 AM
    Hi all, I am doing a full mortgage application this afternoon. It's a remortgage with a different lender. Apparently there is no issue with affordability. The only thing I am unsure about is whether I need to disclose the current status of my business overdraft (sole trader), when they ask 'any other debts'. My business account depending on the time of month can be in the black or can be a few thousand pounds into my agreed overdraft limit (£25k). When I run a credit report, my business lending never shows. Should I consider it separate? i.e I don't have to declare the overdraft debt
    Or shall I mention it? They tell me that if they find a debt that is not disclosed the application is likely to fail.
Page 1
    • ACG
    • By ACG 11th Jul 17, 9:31 AM
    • 15,400 Posts
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    ACG
    • #2
    • 11th Jul 17, 9:31 AM
    • #2
    • 11th Jul 17, 9:31 AM
    Is it nationwide? I think they are one of the few lenders to say that.
    Most lenders would not mind, but I would check with the lender.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • AdKM
    • By AdKM 11th Jul 17, 9:42 AM
    • 38 Posts
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    AdKM
    • #3
    • 11th Jul 17, 9:42 AM
    • #3
    • 11th Jul 17, 9:42 AM
    It's with Barclays. Nearly all of my banking is with them. Including my business account, if that might be relevant to the question in original post.
    • AdKM
    • By AdKM 11th Jul 17, 9:48 AM
    • 38 Posts
    • 1 Thanks
    AdKM
    • #4
    • 11th Jul 17, 9:48 AM
    • #4
    • 11th Jul 17, 9:48 AM
    Also I did ask the mortgage advisor if business lending needs to be declared and she just repeated the statement that all outstanding debts need to be declared. Having a debt is not necessarily the problem, but they do ask you if you'll be paying it back at time of remortgage. I don't think a cyclical business cash flow thing should be relevant to a personal mortgage application but I don't want to gamble by not declaring it. But of course I would only declare it if I NEED to.
    • ACG
    • By ACG 11th Jul 17, 9:52 AM
    • 15,400 Posts
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    ACG
    • #5
    • 11th Jul 17, 9:52 AM
    • #5
    • 11th Jul 17, 9:52 AM
    I try to avoid barclays so im not sure on their stance. It does not surprise me that they will not give you an answer though. Barlclays are pretty shocking in my opinion.

    Bare in mind they are offering an advised service, so they have to advise you on whether to disclose it - aside from the fact, an employee of the bank should know their criteria better than most.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • kingstreet
    • By kingstreet 11th Jul 17, 11:25 AM
    • 31,934 Posts
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    kingstreet
    • #6
    • 11th Jul 17, 11:25 AM
    • #6
    • 11th Jul 17, 11:25 AM
    You are an individual, not a corporate body like a limited company therefore all liabilities are yours.

    However, a lender should be willing to look at your accounts and understand the reason for the overdraft and not include it in mortgage affordability.

    I had a sole trader client with a 'company' vehicle on finance. As the finance came out of the business before the applicant's net profit was calculated the lender we used agreed to ignore it despite it being in the sole trader's individual name.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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