Mortgage and Overdraft

junebug87

Hi everyone,

Hoping someone can help. My boyfriend and I are looking to buy a property and I'm concerned that his history of using an overdraft will affect our application. He is now out of his overdraft after coming clean about his prior money issues but had been up to £3k in debt every month since September last year, which resulted in various bank charges along the way. We had to use some of our savings to get him out of the debt, but still have approx £25k for a deposit. We're hoping to get a 85% mortgage with this.

I'm just unsure what to do, would it be better to wait a few months before making a mortgage appointment? How long does this sort of activity remain on your bank/credit history? Will we struggle to get a mortgage?

Any help or advice would be greatly appreciated.

Thank you.

Red-Squirrel_2

Was it an authorised overdraft?

junebug87

Yes I believe so. He had requested the £3k overdraft.

Red-Squirrel_2

If it was an authorised overdraft, and he never went over the agreed limit, and he's properly out of it now, then I'd be surprised if it was a huge issue.

You might want to go to a broker though, they'll have more of an idea of which lenders are fussy on overdrafts/which won't bat an eyelid.

junebug87

Great, thanks for your advice.

GMS

Check credit files to ensure no arrears were reported. If you are concerned why not use a lender who wouldn't ask for bank statements?

junebug87

Hi GMS,

Apologies if I'm being a little naive, but how do you check your credit files? We're FTB and I'm still reading up on all the mortgage options, I had thought all lenders asked for bank statements so I'll definitely look into that.

Red-Squirrel_2

Have a read of this:

http://www.moneysavingexpert.com/loans/check-free-credit-report

Basically, if you read every word on the main site about mortgages, house buying, credit scoring etc. and browse on the forums for a bit you can't go wrong and will pick up a lot of knowledge to put you in a good position to navigate the whole FTB process.

LplateSaver

junebug87 wrote: »

Hi GMS,

Apologies if I'm being a little naive, but how do you check your credit files? We're FTB and I'm still reading up on all the mortgage options, I had thought all lenders asked for bank statements so I'll definitely look into that.

http://www.experian.co.uk/consumer/statutory-report.html

http://www.equifax.co.uk/Products/credit/statutory-report.html

Www.noddle.co.uk

Thrugelmir

Off topic but relevant. Why the overdraft? That's the lenders concern. People fall into different camps. Your boyfriend into doesn't manage money well. Is he ready for the responsibility and commitment of a mortgage. Paying for 25 years or more is a long time. Requiring a disciplined approach.

junebug87

I'm not sure how relevant it is. He had a personal loss that led to him seeing spending money as a coping mechanism. It's unfortunate that it went unnoticed for so long, as we'd been planning on buying a house for a while, but it's difficult to judge how people react to grief. He's now receiving counselling and is very regretful of his actions, and we're dealing with it together. Other than this issue, he's had no previous problems with managing his money, and I've always been very good at managing my own. We're both in full time employment, have been renting together for 4 years and have a decent combined income and deposit. To be on the safe side though, I'm now in control of all of our finances and savings. Thank you for your comment, but the commitment of buying a property and paying back the mortgage is of no concern at all.