Could going into unauthorised overdraft jeopardise mortgage?

thenewbee

Me and my partner are FTBs, hoping to buy with the HTB scheme (mortgage guarantee). Have a DIP from London&C and they're hoping to place us with Halifax.

We have a good credit record between us- only thing problematic is I've recently applied for a new credit card to balance transfer. Until I just received notice from our current account bank that we went into an unauthorised overdraft last month because my other half forgot to set up a standing order for our rent.

Could this jeopardise our mortgage application?

ACG

Yes.

At 95% you need to be pretty much perfect. If your bank is halifax (or part of the group) you may find it an issue. Also if they request bank statements showing you went over then again it could be an issue.

You might get away with statements that do not show it if it is very recent but i would speak to your advisor to let them speak to halifax as the rest of the case might be good enough to pull it through or he might know away to avoid making it public knowledge to halifax.

thenewbee

Thank you for your prompt response. It's so frustrating! He was out by a day so there was only one day we were over our limit but I know these things don't matter to banks. Will speak to our broker and see what she thinks.

Edit - the account is with First Direct

ACG

If you went over last week and they ask for bank statements for the last 3 months and your broker has 3 months which does not cover this day or 2 - you may be able to get around it assuming its not showing on your credit report or an application is made prior to report updating...

Without seeing everything its difficult to say but if Halifax get wind of it then i would say you really are going to struggle. Mistakes happen but at 95% lenders are generally not interested especially if its a week or so before an application is made.

thenewbee

It happened on 4 October so I think we're not going to be able to hide it from them, but will they ask for bank statements from our joint account? We each have our own current accounts and the joint is only used for rent utilities etc. How quickly will it show on our credit report?

ACG

Theres a thought....

I cant answer the question but mention it to your broker.

thenewbee

Just spoken with our broker and she doesn't think it's fatal as it was a one off and rectified the next day. Hoping she's right!

ACG

Fingers crossed.

I hate 95% mortgages... i've attempted 3 and none have gone through - 1 was kind of expected though.

Ive just realised... dont let that scare you. It could just be my clients having poorer credit reports than you or it could be me not being very good at getting them through at that LTV.

dotdash79

If you can show it's a mistake rather than a shortage of cash, that might help.