Moving forward

loveyourmoney

Hey all

My partner has dreams of owning their own home. I have spoken to them about moneysavingexpert ways, which I have adopted, and they are making changes. If someone wants to own their own home but have been in their overdraft for over 10 years how long would they need to wait, i.e. if they were out of their overdraft, until their application for a mortgage was taken seriously?

Any advice welcomed...

LYM

minimike2

I think the question is more of if they have had an overdraft for ten years, where are the savings coming from to pay the deposit?

loveyourmoney

Yes fair enough. I mean if they were able to get that in check and then build up a deposit. They would be looking to buy in the North East.

minimike2

If that were the case then they would have the ability to repay the overdraft.

To be fair being in an overdraft doesn't stop one from applying for a mortgage. It doesn't help it though with some lenders and all would need to class it as a revolving credit commitment.

upoiupou

As I understand it you're talking about them paying off their overdraft then saving for a deposit - is that right? I'm not sure it will make a difference to a mortgage application unless they had negatively affected their credit history by failing to meet the terms of an approved overdraft - eg going over the approved limit into unapproved.

When I applied for my mortgage, they looked at my last six months of bank statements, any current debts and credit history. If your partner is applying after being out of their overdraft for several months, and hasn't negatively impacted their credit history with the way they managed their overdraft, I don't think the past overdraft would have any impact at all. But someone else here may know better than me.

loveyourmoney

Thanks upoiupou - it's just good to have an idea of where we are at. Hopefully we can get this to work in their favour and get them into the black with some savings.

Thrugelmir

Clear your debts. Then each open Help to Buy ISA's. Saving needs to become a discipline. How quickly you save is a matter of choice.