Will I be approved for mortgage?

Becswa

My partner and I are looking to buy a house.
I have recently got a new job as a teacher (newly qualified), on a full time, permanent contract. However, I have a £1000 overdraft that I max out each month and a credit card of £800 that I am starting to pay off (each because of a long summer with no income!). My overdraft is with my student account and interest free for three years. Now that I am earning I pay £100 of my card off each month.
I am worried I will not be approved because of this. I have never been late on a payment and have had phone contracts, paid bills and rent previously.
Is it worth reducing one of these debts? I have a very supportive family who are willing to lend me some money to clear one or the other.
Many thanks!

ACG

How much are your incomes?
How much is the purchase price?
How much is the deposit?

Currently are you renting/living with parents or...?

This could be taken into account as your living in your overdraft - so if the new mortgage is more than your currently paying then it could be an issue (but if you could answer the above that would help).

Becswa

P.s. We are looking to do help to buy, have seen a house and have the 5% deposit

Becswa

I earn 21500 and he earns 15000. We are currently renting. The house is 139950 and we have 8000 to deposit. Do you think I should take some family help and reduce overdraft?

Becswa

The mortgage would be more than rent by about 200 per month but I am now earning which I wasn't before.

Becswa

Any advice on this massively appreciated!

ACG

Tricky one.

I would say get out of the overdraft, pay the credit card off and then look at it. At 95% everything needs to be spot on.

If you have the savings then clear the debt stop paying interest and you will be there that little bit sooner. Depending on how much 5% represents you might even be able to save it whilst the application is going through.

Becswa

Thanks, at the moment I can pay one off in full now and then pay the other off in instalments each month. Which do you recommend getting rid of first?

ACG

The overdraft i think is the biggest one.

You may pass affordability with the credit card, however constantly being in the overdraft will always look bad.

Also i know 1 of the 2 companies who do help to buy underwrite the mortgage based on it being 7%. It might be worth checking you can afford the payments at 7% interest... if you dont think you can, then its unlikely the lender will.

Becswa

Ok, do you think it will look bad if my Dad 'bails' me out? He has gifted it to me I just don't want it to look bad.

ACG

95% mortgage, living on borrowed money, gifted deposit, increased expenditure....
Take out what you know about yourself and look at the facts, would you lend yourself the money?

I try to avoid 95% mortgages where possible so im not the most up to date with how lenders underwrite them. I would get the overdraft cleared and try to live in a positive balance for a couple of months before making an application.

There are advisors on here who i think specialise in those mortgages who might give a more accurate answer though.

EDIT:
I have just read that back, i just want to say im not saying you wont get a Mortgage, im saying i think you stand a better chance once the debts are cleared and you can evidence that you do not have to live in the overdraft.