Mortgage App. Advice please regarding overdraft & credit card

bfc1977_2

Hello there!

I'm after a bit of advice in advance of preparing to apply for a mortgage once I have repaired my credit report.

I've currently got a credit card and an overdraft both of which are currently being used - I'm in my overdraft every month & I have a credit card balance that will take some time to pay off.

Question is, is it better to pay off my overdraft & remove the facility so that I've only one means of credit, or would it be better to pay it off and leave the facility there?

Thanks in advance.
John

Thrugelmir

Constant use of an overdraft suggests to a lender that your finances are stretched. Would take relatively little for you to be financially distressed. Living pay day to pay day to repay a mortgage over 25 years is not an ideal position from a lenders perspective.

Typhoon2000

I don't think it will make difference if you the facility or not. Not having gone into your overdraft and having positive cash flow for the previous 3 months will definitely help.

MikeBrown123

After having gone through a similar process recently, I can say that having as little credit used as possible will have a big impact on your application.

Lenders will want to know that you can afford to pay the mortgage each month with your own salary, rather than dipping into credit each month, as the liklihood of you missing payments or defaulting is much, much greater.

I paid off everything a few months prior to application, and my mortgage has just been accepted :j:j:j:j:j:j:j:j:j:j

traceyhealy88

We were rejected by Natwest in march for going into our overdraft by about £50, they told us that was the only reason we were rejected.

Wozza85

Depends on the lender basically. Some care some don't!

bfc1977_2

Thank you all for the replies, think I'll make an effort not to use it at all, once it's paid off!

:beer: