Overdraft & mortgage application

CluelessFTB_2

Hi All,

I will hopefully in the next couple of month be applying for a mortgage. I have for the last few months been in my overdraft. This is a planned OD of £1200, most months I have been in it by £400-600 but this month I have been in it by £850 due to lots of birthdays this month and all my friends getting married at the same time!!

I have just paid £700 back into my account so I am only £200 OD, by the time pay day comes I will be out of it and will then try my best to stay out of it!

Will this stop me getting a mortgage? I am hoping to do the Help to Buy scheme with a 5% deposit, it iwll be a single application due to my boyfriends credit history. My credit rating is 999 on expedia.

R_P_W

999 score is a made up number. Being in your overdraft all the time suggests to a lender you cannot manage your money.

CluelessFTB_2

Thanks RPW - Can you explain why it is a made up number? My rating was 'Very good' and has gone up to excellent.

Thrugelmir

CluelessFTB wrote: »

but this month I have been in it by £850 due to lots of birthdays this month and all my friends getting married at the same time!!

Sometimes you need to put yourself first. Only spend what you can afford to. If buying a home is a priority. Then saving should come first. Learn to economise and manage your money. No one will think any less of you.

CluelessFTB_2

Thanks Thrugelmir - I will do from now on! I have a friend getting married abroad next month and spent 6 months finding the cheapest deal I could get. I am her maid of honour and she ia already aware how frustrating I have found having to pay for this aswell.

From the end of this month the money is only going on must haves!! Which frustratingly I wish I could have started already.

R_P_W

CluelessFTB wrote: »

Thanks RPW - Can you explain why it is a made up number? My rating was 'Very good' and has gone up to excellent.

It's a worthless number. Or a worthless status. Hope your not paying a monthly membership for it!

Yorkie1

CluelessFTB wrote: »

Thanks RPW - Can you explain why it is a made up number? My rating was 'Very good' and has gone up to excellent.

Lenders use internal scoring systems, so those of the credit reference agencies are irrelevant to lenders.

bigadaj

No one has commented on the score being supplied by Expedia - probably mOre worthwhile and better value than an experian one!

CluelessFTB_2

bigadaj wrote: »

No one has commented on the score being supplied by Expedia - probably mOre worthwhile and better value than an experian one!

haha - I hadn't even noticed I had put that! In my defence I did spend yesterday booking flights for my boss on Expedia!

StrawberryTwist

Hello,

We didn't use the help to buy scheme but when we had to hand over bank statements I was so, so worried as we had been in our overdraft, I was convinced we were doomed...but we completed on our home last week

Obviously not being in an overdraft is better lol and I won't go it near it now! I really tore myself inside out over it. But I just wanted to post to tell you I really don't believe from reading others experiences as well as my own that overdraft usage on its own is a show stopper!

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As an add on, regarding credit 'scores'. I 'follow' Martin Lewis on facebook and he himself posted the other day that he was doing a piece on TV on how to improve 'your credit score' Its not surprising it all gets a little confusing sometimes.

Anyway - good luck with everything.

Thrugelmir

StrawberryTwist wrote: »

Obviously not being in an overdraft is better lol and I won't go it near it now! I really tore myself inside out over it. But I just wanted to post to tell you I really don't believe from reading others experiences as well as my own that overdraft usage on its own is a show stopper!

Overdraft usage is not neccessarily a show stopper. Much depends on the individual details and circumstances of the applicant(s). At 95% LTV though, underwriting will be very strict. So although people may not be in a position to save for a deposit. They need to demonstrate that their day to day management of their finances is extremely disciplined. As the other 20% is only a temporary loan. When 5 years is up repayment of this will kick in as well. No point in applying on a wing and prayer that it will be affordable. If its not now, then unlikely to be in the future.