Advice on finanaces for getting a mortgage!

CGK1001

Hello,

I am starting to save for a deposit for a house and am looking to buy in the next two years. I am sorting my finances out now so hopefully there will be no unexpected problems when I apply for a mortgage in the future.

I have two questions, I currently rent a property with my boyfriend and have done so for the past two years however my bank account is still registered at my parents address - Will this cause a problem when applying for a mortgage and if so shall i just change the address now or will it not be an issue?

Also I have an overdraft of £1450 and am in the overdraft not to long after being paid. Will this affect my credit rating? I am thinking about tranfering the amount to an interest free credit card, cancelling the overdraft and paying the credit card off at £100 a month - is this the best thing to do or does the overdraft not affect my credit rating?

Any advice would be greatly appreciated!! : )

StuC75

Its best to have more financial history linked to where you live. Where are you on the electoral register?

request you free credit file (dont fall for the credit score info), and see what it is showing for your current account.

Lenders may view such overdraft dependency as a negative so it is best to resolve asap, especially as it contradicts to be saving for a deposit - especially if the overdraft is costing you a monthly fee..

Clear off the overdraft then build up the savings for a deposit.

Thats not to say it isnt possible your way, its just that lenders can be selective with who they accept for the better deals..

nuks

My mortgage broker told me that being constantly in overdraft affects credit rating. On the address issue, I'd make sure all accounts are registered at the same address and that you are on the electoral roll at that address. I wouldn't necessarily cancel the overdraft facility altogether, perhaps reduce the limit, especially if you have too much credit available? And I wouldn't apply for any credit card or new bank account in the year (or 6 months) prior to making the mortgage application. SO any changes make them now...

fiesta04

Asking for a lower OD limits results in a Credit Check and could result in your Bank withdrawing OD and wanting immediate payment. So clear OD as quickly as possible.

F4

CGK1001

Thank guys thats really helpfull : )

Think i'll change my address and pay off my overdraft - shall I also reduce the amount of the overdraft or just leave it but not use it?

nuks

CGK1001 wrote: »

Think i'll change my address and pay off my overdraft - shall I also reduce the amount of the overdraft or just leave it but not use it?

That's not an easy answer - how much credit do you have available to you on all credit cards, how much total debt, what is your annual income, etc - if you post all that info here someone might be able to help.

I have a £2000 overdraft limit on one of my cards (and £250 on another) and I was thinking about reducing it as I have credit available on CCs... I'd be curious to find out whether it hurts credit rating to have such a high OD limit, even if not used. A couple of years ago that OD limit was my only credit available and it was actually £3500 but I got credit cards since then.