We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Does an authorised overdraft affect a mortgage application ?

Options
lrlrip
lrlrip Posts: 590 Forumite
Part of the Furniture 500 Posts Combo Breaker
in Mortgages & endowments
DD and her BF have a mortgage in principal from the Nationwide, survey is being carried out this week and full application for mortgage sent in Friday. DD is now worrying that her authorised overdraft will affect this decision.

Does anyone know thanks?

Comments

  • kingstreet
    kingstreet Posts: 39,256 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The agreement in principle should have covered such an issue at that stage. Who is providing the overdraft facility?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • lrlrip
    lrlrip Posts: 590 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    kingstreet wrote: »
    The agreement in principle should have covered such an issue at that stage. Who is providing the overdraft facility?

    Her overdraft is with the Royal Bank of Scotland
  • kingstreet
    kingstreet Posts: 39,256 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I can't see it being an issue if it wasn't at the AIP stage.

    It seems only Yorkshire BS has an issue with lines of "unborrowed" credit at this time and may reduce mortgage borrowing power by an equivalent amount.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • lrlrip
    lrlrip Posts: 590 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    kingstreet wrote: »
    I can't see it being an issue if it wasn't at the AIP stage.

    It seems only Yorkshire BS has an issue with lines of "unborrowed" credit at this time and may reduce mortgage borrowing power by an equivalent amount.

    Thank you, she is stressing BIG time, just hope it does not take too long as I can't cope with all her questions lol
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    lrlrip wrote: »
    DD is now worrying that her authorised overdraft will affect this decision.

    Does anyone know thanks?

    Is it utilised very often?
  • lrlrip
    lrlrip Posts: 590 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Thrugelmir wrote: »
    Is it utilised very often?

    Yes all the time. She has just been gifted money so should she clear it or is it too late if they check?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    lrlrip wrote: »
    Yes all the time. She has just been gifted money so should she clear it or is it too late if they check?

    May well impact the lenders credit score. As the history will be part of the data the credit agency keep.
  • sp5291
    sp5291 Posts: 4 Newbie
    I am just going through the mortgage process with a broker at the moment and I have similar concerns. He advised me that it is only overdrafts that are used on a regular basis (like mine!) that cause problems and then only with certain lenders (as has been said before).

    One of my options was with Nationwide for a fixed rate deal and he advised me not to go with them as they have a "history of declining lenders based on what they see to be excessive overdraft usage".

    I also enquired about clearing the overdraft off, but he advised that it would not show up on my credit file quickly enough to be of any use.

    Sorry to put a downer on things :(
  • michelle2008
    michelle2008 Posts: 601 Forumite
    What size of overdraft are we talking about here? I have a £100 facility on my account which I dip into for a couple of days a month. Would that have an impact?
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.6K Spending & Discounts
  • 244K Work, Benefits & Business
  • 598.9K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture