Mortgage application prep: Personal Loan to pay off Overdraft?

Sncjw

They will take Any loan or overdraft payments off the amount they will lend you. It will be a lot lower if you have ethier.

John_G_Jones

SimplyRed1001 wrote: »

My salary is £27k and this is not good news. I had imagined I would likely be eligible if I applied at that time and I was trying to improve what I might be offered. Waiting another 12 months after paying things off is something I'd don't really want to consider.

Not managing to stay in the black is a pretty big red flag, it shows you probably can neither budget well nor plan ahead for emergencies.

It won’t rule you out of getting a mortgage but it’s definitely worth your while understanding how you got to this position in the first place if you don’t want to run into trouble down the line.

System

I also have an overdraft which makes up 10% of my available credit amount. I use it almost fully, without ever going over, and pay it off plus 50% with my salary every month.

You may temporarily pay it off but you never get out of it because by next pay day you've used all but £5-£10 of it.

Looking at your finances to an outside person it looks like you live beyond your means and the fact you can't even get out of your overdraft and stay out of it for a few months in a row supports that.

cjv

Have you checked if you are eligible for Money Transfer card to pay off your overdraft?

A4445

I work with mortgage applications and being overdrawn will not affect your chances of a mortgage. The affordablity calculator will take being overdrawn into account and it would affect your affordability. Ignore comments about being overdrawn will affect your chances, all that matters is can you afford it and your track record of payments. The computer program that asses you and the underwriter doesn’t care if you pay in full, part or minimum. Some advice here it not correct.

I do work for a mainstream lender but I guess other finance companies maybe different.