One applier in overdraft, but big deposit and wages?

capt_yossarian

Hi guys

The other half and I are looking at getting a first-time buyer mortgage. We have a 120k deposit, and both earn 40k. We're looking at about 360k for a flat -- yeah, frightful London...

My bank statements are healthy but the old lady's is in overdraft for two of the last three months. Will this be a problem given the size of the deposit and our wages? I am not sure. I guess I could mayyybe borrow 240k on my own with my wage and deposit, but it'd still be easier to go in with her I suspect...?

Cheers to all the regulars on this forum by the way, brilliant source of information!

GMS

If the overdraft is within agreed limits then should be ok.

Better still you may want to apply to a lender who don't ask for bank statements.

ChopperST

It depends on the lender. Some see it as a red flag that an applicant is living beyond their means. I was in my first direct O/D (interest free) when we applied for our current mortgage and was declined. We had to appeal and point out the money was being stoozed in a savings account but was a bit touch and go.

Other lenders arent as bothered. In this situation I'd discuss with a whole of the market broker who would advise you more appropriately.

ChopperST

GMS wrote: »

Better still you may want to apply to a lender who don't ask for bank statements.

Are there still lenders that don't?!

GMS

ChopperST wrote: »

Are there still lenders that don't?!

Yes but every lender reserves the right to request them. Not all will ask for them as a matter of course

R_P_W

Probably wont be an issue. But WHY go into the overdraft? Looks like you earn a reasonable income and you have 120k as a deposit? Just clear the overdraft!

MrsHappy85

I have just bought a house with my husband. I had an overdraft I am in and out of regularly and didnt clear before completion as it was not required by our lender, we also have a couple of other managable debts.

We were fine, although we did use the help of a broker I found on here as I hadnt a clue what I was doing and who to approach.

We only had a 10% deposit, combined income about 50k, borrowed £162,000.

Goodluck.

sulphate

Can you clear the overdraft with some of the savings?
Is she living permanently in the overdraft?
What's your credit like, any adverse history?

FYI my husband and I just bought our first house and have a mortgage with Lloyds, they never asked for bank statements. Our advisor said that this was because we had a "pass A" credit history and had a LTV of "only" 80%.

Thrugelmir

Bank statements reveal spending habits. Expensive hobbies, numerous cash withdrawls , activity with book makers etc. All help a lender build a picture of the potential borrower and their attitude towards money.