Mortgage and overdrafts

jacko198

So I am currently saving for a Mortgage deposit with my girlfriend looking to buy somewhere hopefully in the middle of next year. On a help to buy new build scheme.

I have saved a bit of money towards it (5k) and have no debts etc. And currently a good credit score.

My girlfriend is saving aswell but not quite as much (2k) But she has currently got an unpaid student overdraft of £1200 and the usual student loan debts (which she is paying off through her wages etc)

So I am wondering if we should be paying that overdraft off before applying for a mortgage, obviously loosing a big chunk of our deposit.

Ofcorse we are still chipping away at the overdraft but knowing that if we pay it all off we will loose a lot of our deposit putting is back a good few months of saving.

Any help and advice would be appreciated. Sorry if posted in the wrong section.

cakeforbrains

My understanding: that to the bank it will look like you've borrowed 1.2k of your deposit, and also that being in your overdraft permanently looks like you're got financial troubles. It's also worth keeping in mind that your girlfriend's bank can recall that overdraft at any time. If it were me then I would just pay it off.

Somebody who actually knows will be along soon, I'm sure.

ncfc1980

Don'tk now if this is particularly relevant, and obviously it's preferable to clear an overdraft if you can. Having said that I have and £800 limit which I regularly go close to, although I clear it in full each month with about 2.2k salary going in. I've just applied for a 95% mortgage with NatWest and got to offer stage with very little difficulty.

roje

My overdraft is £3500 and I always go at least a grand into it each month before being paid. It wasn't even questioned and my mortgage is with my bank too, so they know it's a pattern.
That said, I had a good LTV ratio.