Costantly in overdraft, how will it affect my mortgage application

kerryi27

The C0-op have asked to see my husbands 6 mth bank statements as he is self employed. Although he hasnt incurred any fees or gone over his overdraft limit, he has been stuck in it for last 4 months due to me being on maternity pay.
Has anyone been rejected a mortgage with any lender for this in the past??

opinions4u

It forms part of the overall picture as to how applicants manage their finances.

When I was underwriting mortgages, I was always a little bit more cautious when I became aware of constant overdraft use.

The kind of questions that I would ask myself (and often the customer) were along the lines of:

1) Do they always operate within the agreed limit?
2) Is the overdrawn amount increasing, decreasing or staying the same?
3) Does the customer have savings that would more than cover the debt?
4) Is there a specific reason for the overdraft and is the reason still relevant?

Your answers to (1) and (4) are fairly clear, and wouldn't unduly concern me. An increasing debt would worry me, espeically at a time of taking on a mortgage commitment.

But if your income is likely to increase in the not too distant future, using a well managed overdraft is unlikely to lead to a decline decision unless there are other significant concerns with your application.

kerryi27

OPINIONS4YOU,

Do you think I should write a message to underwriter on statements to say that my husband has been in overdraft due to my maternity leave and we will now be getting out of it.

Afro_Thunder

kerryi27 wrote: »

The C0-op have asked to see my husbands 6 mth bank statements as he is self employed. Although he hasnt incurred any fees or gone over his overdraft limit, he has been stuck in it for last 4 months due to me being on maternity pay.
Has anyone been rejected a mortgage with any lender for this in the past??

From what I have heard, the Co-op take into consideration your outgoings and ingoings. What you have left over after everything is taken out, should be enough to cover the mortgage, bills and general cost of living. So you being in an overdraft is not a major issue, as long as you never went over the agreed limit.

kerryi27

opinions4u,

I have just seen your post which is a guide to what what underwriters look for. You mention hand written payslips.

My payslips are just a simple printout on white A4 paper with employer name, employer number, amount paid and tax, ni deductions etc.

My boss said he can make a more professional one for me from his Sage accounts program, however he is on holiday until next Thursday and I dont really want to wait so long to post my docs.

Also, I have noticed, he still has my maiden name on, even though have been married nearly 3 years.

I have a marriage certificate.

Do oyu think I should wait for payslip to be done correctly in my name and to look more professional.

Any help appreciated.

henrysprings

yeah make sure you never go over the overdraft, that will really cost you

kerryi27

how about payslips as post #5
anyone with any suggestions?

thanks