Does overdraft affect mortgage application/credit rating?

rharwin

Apologies if I am on the wrong forum but I was hoping somebody may be in a position to assist.

I have an agreed overdraft of £1200 with Barclays and pretty much use £1000 of it on a monthly basis.

I have had no defaults on it.

Will this overdraft have an advers effect on a future mortgage application/my credit rating?

Many thanks for any help.

Annisele

Having access to an overdraft isn't usually a problem, but constantly using it is - because it suggests that you might not be managing your money very well.

Do you have savings elsewhere? If so, can you transfer £1,000 of them to your current account?

If you don't have savings elsewhere, I wouldn't worry about it. At the moment you'd need a 10% deposit to get a mortgage anyway, so the lack of savings would be the problem rather than the overdraft. If you first pay the overdraft off, then build up savings, then the fact that you have access to an overdraft shouldn't cause a problem when you come to buy.

eschaton

rharwin wrote: »

Apologies if I am on the wrong forum but I was hoping somebody may be in a position to assist.

I have an agreed overdraft of £1200 with Barclays and pretty much use £1000 of it on a monthly basis.

I have had no defaults on it.

Will this overdraft have an advers effect on a future mortgage application/my credit rating?

Many thanks for any help.

I would suggest that the banks will think along the lines of.... you can't live within your means the now so why the hell would we give you a mortgage.

HR1_2

I have been reading throught the threads and whilst much of the advise is very helpful I do struggle with the way some of the advise is put across. I'm all for being realistic but is there any need to be rude about it? Perhaps it's not intented but a little thought into how your comments are coming across wouldn't hurt.

Thrugelmir

HR1 wrote: »

I have been reading throught the threads and whilst much of the advise is very helpful I do struggle with the way some of the advise is put across. I'm all for being realistic but is there any need to be rude about it? Perhaps it's not intented but a little thought into how your comments are coming across wouldn't hurt.

Reading posts is emotive as often the tone is misunderstood. Few on here are passing judgement, merely expressing the hard facts of life. Often continuing the exchange resolves misunderstandings.

Having dealt with finance for many years. I'm more than happy to help people that genuinely want to help themselves. However I won't waste my time either.

_Andy_

HR1 wrote: »

I have been reading throught the threads and whilst much of the advise is very helpful I do struggle with the way some of the advise is put across. I'm all for being realistic but is there any need to be rude about it? Perhaps it's not intented but a little thought into how your comments are coming across wouldn't hurt.

I've read the comments on the thread and there's nothing rude about them (admittedly that's a matter of opinion). You've asked a question and have been given factual replies. You may not like them and they may not have been the answers that you wanted or expected but there's no rudeness there.

Wutang_2

HR1 wrote: »

I have been reading throught the threads and whilst much of the advise is very helpful I do struggle with the way some of the advise is put across. I'm all for being realistic but is there any need to be rude about it? Perhaps it's not intented but a little thought into how your comments are coming across wouldn't hurt.

What you on about you nutjob?

_Andy_

Wutang wrote: »

What you on about you nutjob?

Put more concisely than my post. Nice one Wu

jockosjungle

If you use £1000 of it on a monthly basis I assume it means that at the end of each month you owe £1000, if this is the case you are living within your means but at £1000 down each month. If you have money saved for a deposit (presumably) then transfer £1000 to clear the overdraft (saving interest each month) and instead of being £1000 down each month you will be in credit most of the time and end each month at £0.

To be perfectly honest, phrases like why the hell would they gave you a mortgage is pretty rude in anyones opinion. Maybe the facts are correct but some people could do with improving the tone

R

_Andy_

The post in question was saying hypothetically what the lender would think -

"I would suggest that the banks will think along the lines of.... you can't live within your means the now so why the hell would we give you a mortgage."

Which is a fair point

Annisele

jockosjungle wrote: »

If you use £1000 of it on a monthly basis I assume it means that at the end of each month you owe £1000, if this is the case you are living within your means but at £1000 down each month. If you have money saved for a deposit (presumably) then transfer £1000 to clear the overdraft (saving interest each month) and instead of being £1000 down each month you will be in credit most of the time and end each month at £0.

Well yes - but if the OP could have transferred £1,000 to their current account, I think it would be reasonable to assume that they would have done that already. So I don't think eschaton was wrong, even though I took a different tack myself.

Sometimes the most helpful thing anybody can say to a poster is "you are being an idiot and your idea is stupid"; more reasoned arguments can get lost in an OP's blind optimism