Overdraft influence on mortgage application

steveg001

Hi,
After my query relating to credit cards I now have one relating to my overdraft.
I have a £2,000 overdraft facility with my current account which I am almost permanently using.
Will this be detrimental to a mortgage application?
Thanks in advance.

ACG

Probably yes.

It shows you are permanently living beyond your means (in the eyes of the lender) as your always borrowing money.

Thrugelmir

steveg001 wrote: »

I have a £2,000 overdraft facility with my current account which I am almost permanently using.

How do you intend funding the costs relating to the purchase of the property?

steveg001

Thrugelmir wrote: »

How do you intend funding the costs relating to the purchase of the property?

With money from a relative.

bigadaj

Could be tricky, gifted deposits need to be given with no reservation, and also have the drawback that they show you haven't had the discipline to save.

Combine that with always living in your overdraft, ie spending the banks money and not your own, and that doesn't give much confidence of maki g mortgage payments.

Get rid of the overdraft as soon as you can and ideally get into a savings habit with a regular savings account.

Thrugelmir

steveg001 wrote: »

With money from a relative.

Does nothing to aid your already very weak application from a lenders perspective.

Suggest you start by cutting back and clearing that overdraft.

Gentoo365

In an ideal world, if the relative is looking to help you then they could gift you enough to pay off the overdraft and the credit cards, then you can spend a few months 'within your means' so that your finances look healthier.

As mentioned above, you need to show that your finances are not deteriorating each month, and are capable of dealing with shocks and unexpected payments.

ACG

Gifted deposit and living in an overdraft - affordability wise you would have to be walking it or have a hefty deposit. percentage wise - if not both.

Im not sure you will get this whilst your living in your overdraft, you need to be out of it for a few months prior.

steveg001

Thanks for the replies so far.
The credit cards will be paid off imminently and the overdraft does not increase each month, I just have lived within it for some time.
Obviously now the cards are being paid off I will use the surplus to bring down the overdraft, but it won't happen overnight.
Deposit wise and affordability of the mortgage payments, the deposit will be around 25% and the payments will be no more than the rent I have been paying.
Does this make the position any better?