Overdraft regularly used, but now cancelled

mortgage202

Hi, I have been using my £5k overdraft quite regularly, I have recently stopped using it for last 2 months, but as I am going to apply for a mortgage next month, I have now completely cancelled this overdraft facility and Lloyds says the overdraft will be removed from my credit file on or after 20th of November 2015.

Will this improve the chances of getting a mortgage next month as I have been using at least 4.5k of the overdraft quite very regularly over the past few years.

Thanks!

Thrugelmir

Lenders have access to your past 6 years of credit history data. So overdraft usage may well be factored into any decision they make.

From a lenders perspective why the overdraft usage if you've the money available for a deposit.

mortgage202

Thats the silly mistake I have done, I was just too lazy to transfer the funds from savings to that account. How are my chances with Halifax? Is there any solution to my problem?

THanks

Humphrey2012

Hi - I am not saying that using an overdraft doesn't get taken into account, however we use ours and we have just received a mortgage offer from Halifax. I think if your affordability is ok then the overdraft won't cause you any problems.

kingstreet

Use of a small agreed overdraft is not going to be a problem. Cancelling it was probably an over-reaction and unnecessary.

Frankly, Halifax wouldn't particularly care.

What would be a problem is over-limits, unauthorised borrowing charges etc.

Thrugelmir

mortgage202 wrote: »

Thats the silly mistake I have done, I was just too lazy to transfer the funds from savings to that account. How are my chances with Halifax? Is there any solution to my problem?

THanks

A lender isn't interested in your particular circumstances. Lending policy will be set at a generic level as to how the data is viewed.

There would be concerns as to how you manage your personal finances if you did have the funds available.