Underwriting

Touchdown49

Hi

Over the last year or so I have had a number of mortgage applications turned down by underwriters after each time being accepted in principal, once after the survey had been completed. As usual, there is no feedback from the underwriter which is very unhelpful. I have been trying to work out the problem and think it may be due to my bank account. The underwriter always asks for 3 or 6 months bank statements, but what do they look for ? I have a loan which goes oput about 4 days before my pay which almost always takes me over my overdraft limit which I am untimately charged for, could this be what changes the underwriter's mind ? I am ready to apply again and really need to know what is causing my refusal.

Any thoughts would be appreciated.

Wutang_2

Sounds pretty obvious to me - and think you know the answer too! Overdraft.

luckyfool

If they ask for bank statements it is likely to verify income coming in, and how you manage your account. If you exceed your negotiated overdraft limit every single month then they are entitled to wonder about whether you are going to be able/willing to manage your mortgage responsibly.

Have you thought about a slightly larger overdraft to avoid going over your limit, that or tightening the belt for a couple of months so that making that loan payment does not push you into an unauthorised overdraft? If you are not able to do that then the banks are entitled to think that you should not have a mortgage.

beecher2

As others have said, it is the overdraft. Have you posted a Statement of Affairs to get people to look at your finances - the Debt Free Wannabee forums can help you cut back on expenditure in order for you to manage your finances better. Can you aim to not use your overdraft at all, or wait until the loan is paid off before looking for a house? Or use part of your deposit to pay off the loan?

_Andy_

Applying again if your situation is the same is likely to just end up in another decline (and yet another credit search on your file).

Cannon_Fodder

Touchdown49 wrote: »

almost always takes me over my overdraft limit...

Not just into the overdraft.
Not just close to the overdraft limit.
Over the overdraft limit. Almost always.

You are unable to manage your finances. Consistently.

Ask yourself, if you were a Lender, would you want your business.

g_attrill

I think you will need to do some belt-tightening to always be sure you are in a cash-positive situation, then try again when you have 3+ months of clean statements.

I notice you posted about credit card debts previously, have these been cleared up now?

If you compile an SOA and post it here (or on the debt forum) you might get some tips on how to cut your expenditure to get there.

Touchdown49

Thanks for all your input. I have been much more sensible over the last 3 or 4 months and made sure that there has been sufficient funds until the end of the month and have not gone over my overdraft limit once. I am hoping that this was the issue previously, but I was also wondering whether there was anything else on a bank statement that an underwriter would be looking for. The broker was aware of my overdraft and this information was given to the lender when they accepted my application in principal. I have cleared my credit cards now, apart from a small amount.

I have a family and three young children and really dont want to raise their hopes again before being turned down at the final hurdle.

Thrugelmir

If you are continually dipping into your overdraft to cover day to day living. Then you are hardly in a position to fund the purchase of a home. Keep the dream alive for your family by working towards the goal as a team. I'm sure if you explain the situation that belts have to be tightened ,you can make them understand. Your children will also benefit from a good financial education.