Mortgage Application and Use of Overdraft

dkb

Hello

Our mortgage application is just in the process of being handed in. As its a joint one we had to printout 3 months statements from our current accounts. We have 3, one each and a joint. MIne is fine and the joint one is slightly into the overdraft because we transfer a set amount every month but sometimes we use the overdraft if we get a 'surprise' such as a boiler repair or something. My partner loaned £1200 to a close family member back in April so has been running at -1200 since then. however, the cheque is going in today so the debt will be cleared.

Is this likely to affect our application aversely? I am also providing ISA details to show that we do have 11k of savings.

Also, should this fail can anyone recommend a good mortgage broker in the Leeds area please?

nell53

If your partner has internet banking you could print out the statement after the money has gone in.

dkb

nell53 wrote: »

If your partner has internet banking you could print out the statement after the money has gone in.

That is my intention. I've also considered transferring some money from my account to hers as I'm +1500 but not sure if they'll look at the last 3 months and say "nah, you havent managed your money for the last 3 months"

Thrugelmir

dkb wrote: »

MIne is fine and the joint one is slightly into the overdraft because we transfer a set amount every month but sometimes we use the overdraft if we get a 'surprise' such as a boiler repair or something. My partner loaned £1200 to a close family member back in April so has been running at -1200 since then. however, the cheque is going in today so the debt will be cleared.

Depends which lender you've applied for your mortgage with. As to their view.

On the face of it you live on the borderline with the management of your personal finances. If you've no emergency reserve in the joint account.

All of a sudden the family loan gets repaid in one lump sum. May be true, but may be viewed with suspicion.

dkb

Thrugelmir wrote: »

Depends which lender you've applied for your mortgage with. As to their view.

On the face of it you live on the borderline with the management of your personal finances. If you've no emergency reserve in the joint account.

All of a sudden the family loan gets repaid in one lump sum. May be true, but may be viewed with suspicion.

Possibly so but I think the fact we have 11,000 in savings shows we do have access to money in emergency. It's a tricky one to call whcich is why i'm not sure whether or not to proceed. Checked credit report and they've already done the search on 18/11

firsty

Read thread titled:
Mortgage declined by underwriters after mortgage manager being so positive!! (page 3 of forum)

Advice - Get rid of overdraft asap - show you can live without it for at least 3 months...:)

Thrugelmir

dkb wrote: »

Possibly so but I think the fact we have 11,000 in savings shows we do have access to money in emergency. It's a tricky one to call whcich is why i'm not sure whether or not to proceed. Checked credit report and they've already done the search on 18/11

Though savings can come from a number of sources not necessarily. saved out of current earnings.

Your partner has run an overdraft for for some 7 months. Rather than save why wasn't the overdraft repaid. Thereby not incurring unnecessary charges and interest.

Lenders are increasingly looking to lend to people who can manage their personal finances.

dkb

Thrugelmir wrote: »

Though savings can come from a number of sources not necessarily. saved out of current earnings.

Your partner has run an overdraft for for some 7 months. Rather than save why wasn't the overdraft repaid. Thereby not incurring unnecessary charges and interest.

Lenders are increasingly looking to lend to people who can manage their personal finances.

She hasn't saved anymore since she started using the overdraft.

I've asked her all these questions.

dkb

firsty wrote: »

Read thread titled:
Mortgage declined by underwriters after mortgage manager being so positive!!

Advice - Get rid of overdraft asap - show you can live without it for at least 3 months...:)

I read that this afternoon. I'm now deciding whether to attempt to push it through or not. A mortgage broker said it's worth a go as although she's into her overdraft she hasn't gone over it. I'm not so sure but the application has to be in by monday.

I've told her exactly what you've said

ViolaLass

dkb wrote: »

Hellothe joint one is slightly into the overdraft because we transfer a set amount every month but sometimes we use the overdraft if we get a 'surprise' such as a boiler repair or something.

If you have savings, then surely this could be avoided and I find it bizarre that your partner went into her overdraft to lend someone money rather than use her savings.

GMS

You may find that the application will be scrutinised by the underwriters. The obvious question is why is the overdaft being used when savings are there. May well want to see evidence of the savings being built up as it may look like a lump sum deposit due to overdraft being used.

It is difficult now when applying for a mortgage. You are told that you need to demonstrate good credit conduct of which using an overdraft responsibly is doing, but then get questioned for actually being overdrawn!! Can't win.