Applying for mortgage - just cleared overdraft

rla86

Hi,

My partner and I have just obtained an Agreement in Principle for a mortgage.

What I am still quite stressed out about, however, is the next stage of the full application process. Because we are not customers of the bank, we need to supply 3 months bank statements as well as wage slips.

I have recently just cleared my overdraft (previously I was in it for quite a long time, however have now cleared it and am fully in credit again thankfully.) My worry is that the last 3 months bank statements will show me being in my overdraft, apart from the most recent month which is in credit.

Both of our credit scores are excellent and we have no loans or other debts. I am really worried (to the point of losing sleep) that this will be the thing that gets our mortgage application declined even though from now and going forwards, my account is in credit.

I spoke to a mortgage adviser (at a different bank) who said this shouldn't be problem as I did not exceed my overdraft limit, but I am still worried - even though I really hope it will look favourable that I have paid it off.

Has anyone else had similar experiences? Thank you for any help.

Thrugelmir

Overdraft history will be reported to the CRA's. This like other factors will be considered during the application process. Lenders will have internal scoring systems that will have variable criteria. How negatively this is viewed and the impact on your application is impossible to determine.

Obvious question being debt suddenly cleared and deposit available. Where did the money come from? Loan from family being the obvious assumption.

Phil_H_MLIA(dip)_Cert_PFS

A mortgage underwriter will 'take a view' on your recent credit history. Whilst it is unusual and as such not something to panic over, an underwriter can decline a case even if you have remained within your agreed overdraft limits.
It is a largely pointless exercise to ask bank B what bank A might do - the key is to properly determining the most appropriate choice of lender prior to making an application.
Obviously you don't want to hop from one lender to another too much as this can (with most lenders) affect your credit score.
You should not post your specifics here but perhaps the lender name would allow a little clarity on the matter.