Overdraft help..

jade1986

Very general question for the mortgage peeps..

When applying for a mortgage, assuming everything else is absolutely fine, affordability, 'credit rating' etc..

Would having a £250 overdraft and dipping into it quite frequently be a problem? It is purely habit and could be stopped with immediate effect but application is going in tomorrow.

Thanks in advance!

Mrs_Bumble

Do you go up to the maximum overdraft each month? Exceed? These things might cause an underwriter to raise an eyebrow but would depend on the rest of the case profile as to how badly it would affect. Who is the application going in with?

jade1986

Yes pretty much up to the limit, never ever over though, ever. It is The Nottingham BS

CLAPTON

It depends whether it shows on your credit files... but frequent use of an OD, especially if near the limit is often seen as being in financial difficulty.

In any event why waste money on interest charges when you don't have to

Mrs_Bumble

They are likely to request copies of your bank statements so it doesn't matter if it shows on the credit file or not. As long as the rest of the profile looks ok to the underwriter and the LTV isn't too high and affordability too tight then probably won't be an issue. You will have to wait and see I am afraid.

jade1986

We are supplying 3 month's bank statements so it is clear to see, indeed.

It is 95% LTV.. however the mortgage amount of £90k is only 2 x our income.

Nerve wracking times!

If they considered it a problem then would saying the overdraft will be cancelled immediately rectify this? Is it worth writing on the app that we will remove the overdraft or is that just drawing attention to it?

Wutang_2

CLAPTON wrote: »

In any event why waste money on interest charges when you don't have to

Where is this information from?

Some people have to live within their means and certain assumptions are quite irrelevant.