Given AIP from Halifax -will overdraft affect next stage?

Rachelbr21

Me and my OH have recently applied for a help to buy mortgage and have been given an AIP from halifax. Were putting in 7% and then 20% from the government giving us something like a 73% mortgage. My oh has a good credit rating and has recently cleared his credit card and loan. I also have a decent credit rating no late payments etc & cleared my credit card however I used to have an £800 overdraft which over the last few months I have gone into with Christmas and everything. It was cleared each time I got paid and I have now reduced it to £400 planning to cancel it tomorrow when I go to my bank. Halifax will want my last 3 months statements which will show I have used my planned overdraft. Does anyone know if they are likely to say no because of this? Or been given a mortgage with overdraft use? Could I write a letter explaining why I went into it and it's now cleared?

kingstreet

Why do you think Halifax will want bank statements?

ethank

I would not worry about it unless they ask you about it. If you can afford to service both the overdraft and the mortgage, then it will probably be ok.

Rachelbr21

kingstreet wrote: »

Why do you think Halifax will want bank statements?

I just assumed they ask to see them to make sure you can manage your money? Do they not always ask for them then?

kingstreet

They never ask.

However, we do not do 95% HTB - MG business, so we may not be asked as it isn't required on our cases.

Being within an agreed overdraft is not normally a dealbreaker, as long as it isn't for thousands...

Thrugelmir

Rachelbr21 wrote: »

Could I write a letter explaining why I went into it and it's now cleared?

The issue for the lender could be that you are living on the edge. In that you are one pay packet away from trouble. Overdraft usage is a clear illustration of a lack of accessible savings. Which tells the potential lender a lot about you as a potential borrower and your management of your personal finances.

Din85

They have not asked to see mine as far as I'm aware, and that is a 95% HTB, all they where after was one payslip each from me and the wife.

I have used my overdraft every month with out going over the agreed limit, It was only £350.00 and we paid it off in full last month and haven't used it since, but like I said, they have not asked to see any bank statements.

We did give 3 months worth to the mortgage adviser in case they do ask though.

chanz4

I was with halifax bank, my mortgage was also and I was asked for the statements by the broker only.

ValHaller

Thrugelmir wrote: »

The issue for the lender could be that you are living on the edge. In that you are one pay packet away from trouble. Overdraft usage is a clear illustration of a lack of accessible savings. Which tells the potential lender a lot about you as a potential borrower and your management of your personal finances.

Having said that, clearly if you come out of your overdraft each month that is better than being in it perpetually.

But at base there is a certain amount of self delusion, in that you have a 7% deposit and therefore, clearly no need to be in overdraft at all. The delusion is that all of that 7% is actually available as deposit - you are actually paying overdraft fees to have the illusion of a larger deposit. You should stop saving on your deposit until you get out of overdraft and you can stay out of it. Draw back some of the savings if you can and start collecting statements which show your current account always in the black.