Mortgage and Overdraft

Red-Squirrel_2

junebug87 wrote: »

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.

Don't worry, nobody's perfect (even you I bet Thrugelmir! )

People get into debt/bad spending habits for all sorts of reasons. I for one racked up the overdraft/cards while I was a mature student training for a new career, and probably a bit more than was necessary if I'm totally honest! Grief will do funny things to you, too. I hope he's coping better and feeling happier these days but he doesn't need to beat himself up for it.

Good luck with house hunting.

csgohan4

junebug87 wrote: »

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.

I'm afraid it's very relevant in a lender deciding to give you a mortgage. They don't see the personal side of why someone is debt, in fact they don't care, they only see numbers and if you fit the criteria.


It's nothing personal, it's business as they say.


Commitment to paying a mortgage is different from being able to and this based your past history.


Again as someone posted earlier, best to check both your credit files and see if any issues with unpaid or unauthorised overdrafts CCJ e.t.c

Immers7

I would double check on whether it was an authorised overdraft before going anywhere else.

junebug87

Sorry csgohan4, maybe a few crossed wires here. I understand that having an overdraft is of course relevant when applying for a mortgage - hence my original post asking how it would affect our application. The query I was responding to was the reason behind the overdraft, which is personal.

I 100% understand the responsibility involved in having a mortgage and also being able to pay it back, I was simply trying to clarify that I have no concerns in either area. A mortgage is a 25 year commitment and it's not something either myself or my partner would take lightly. We both plan on doing a lot more research before committing, including now checking our credit files, as recommended by yourself and several others.

Sorry if it came across any differently! Thank you for your comments.

kingstreet

Using an approved overdraft is viewed no differently to using any other kind of credit. If it is now ended, it won't be an issue.

TBeckett100

It's the "various" bank charges along the way that could be a sign the account may not have been managed in the best way, unless the charges are interest fees.

I used to use my overdraft (haven't done for a year or so now) but my usage never showed up on my CRA report. I assumed this was because any authorised overdraft was cleared monthly.

junebug87

I've just had a look at some of the bank statements, and while some quote an overdraft usage fee and an overdraft interest fee (the account is with Lloyds, by the way), a couple of the statements referenced an unplanned overdraft fee charged on a daily basis. I'm assuming, having had a look on Lloyd's website, that the first two charges are standard for using a planned, agreed overdraft, but the third is not. The unplanned charges worry me, as I believe these show he has gone over the agreed overdraft on more than one occasion, which (correct me if i'm wrong), will affect credit scores.

Is it true that this sort of activity stays on your credit file for 6+ years?

kingstreet

junebug87 wrote: »

a couple of the statements referenced an unplanned overdraft fee

Which means the approved overdraft was exceeded, or payments which would have taken it overlimit were returned.

Provided none of this is visible in the latest three months statements when you apply, it shouldn't have massive impact.

FWIW some lenders are hot on current account conduct and some not.

londonsaver86

Hello,

I wouldn't worry about it too much. Some banks ask for 12 months of statements and others only ask for 3 months.

If it was an authorised overdraft then he's not really done anything wrong.

Just make sure you don't go into the overdraft now.

I just got a mortgage with Nationwide. They asked for 12 months of statements. 6 of the months I was in a 1k overdraft all the time and they didn't seem to mind. I guess it's just a small part of a bigger picture.

Hope that helps!

Immers7

kingstreet wrote: »

Which means the approved overdraft was exceeded, or payments which would have taken it overlimit were returned.

Provided none of this is visible in the latest three months statements when you apply, it shouldn't have massive impact.

FWIW some lenders are hot on current account conduct and some not.

Does this not show up on credit reports?

Definitely shows your current account on there.