How does using overdraft affect a mortgage application?

taylor86

We use our overdraft frequently, it isn't always paid off in full either. Any idea how this will affect a mortgage application if we apply sooner rather than later? (We are working on reducing this with a view to getting rid altogether it just hasn't happened as quick as we would like)

Thrugelmir

Overdraft usage suggests either a lack of savings or a lack of control over personal finances. Which given that mortgages last 25 years or so. Means there's an inherent risk that something is likely to go wrong in that timeframe.

FlyingCat

I use my overdraft every month. My wages pay it off each month back to zero (or positive), then bill take it down by over £1k.

Just applied for a mortgage and been accepted, was never an issue. Granted the mortgage was for a fair bit less than our AIP amount and I manage my credit well (i.e pay £500 a month to CC).

I think (in my opinion) it depends on other factors, not just the fact you use your overdraft. If you are on the border of affordability it would prob become a bigger issue.

amnblog

Minimal effect.