Getting a FTB mortgage with historic overdraft

[Deleted User]

Hi everyone,

I was just wondering if anyone has applied for a FTB mortgage lately having had an overdraft in the recent past? 

My partner and I have applied for a FTB mortgage in the last couple of weeks, he had an arranged overdraft with a limit of £1000, he was in it every month until it was paid off in full and cancelled shortly before we applied for the mortgage. 

Our broker has said he doesn’t foresee a problem with it based on his experience but I‘ve read horror stories on here that people have been refused because of being in an overdraft. 

I’m hoping that they’ll see that everything else is fine and hoping even more that they’ve only asked for the last months bank statement and then they won’t even see the overdraft but that’s probably wishful thinking! 

Anyone got any positive stories to share as I’m panicking like mad here. 

Thrugelmir

The overdraft will have been reported on your credit file. Any decision will based on the overall picture. 

[Deleted User]

Thrugelmir said:

The overdraft will have been reported on your credit file. Any decision will based on the overall picture. 

I’m hoping they’ll see that we’ll be good candidates for a mortgage. 

Full time, stable and secure employment in the public sector with no chance of redundancy etc, we earn £82k combined each year, partner has one loan and his car, I’ve got no debts whatsoever and credit reports all look really good. 

We paid off his overdraft and a credit card before applying and he got a loan through work to pay off a second credit card to drastically reduce the monthly repayments so affordability is no issue either. We’re not asking for anything near what we could potentially get. 

Keeping everything crossed that it all goes through! 

Kiwistrawb1990

You'll be fine. I paid off a credit card and an arranged overdraft the same month we applied for our mortgage. All went through fine x

[Deleted User]

Kiwistrawb1990 said:

You'll be fine. I paid off a credit card and an arranged overdraft the same month we applied for our mortgage. All went through fine x

Hiya, thanks for your reply 😊
Who did you apply with? 

And if you don’t mind my asking, were you in the overdraft? X

Kiwistrawb1990

[Deleted User] said:

Kiwistrawb1990 said:

You'll be fine. I paid off a credit card and an arranged overdraft the same month we applied for our mortgage. All went through fine x

Hiya, thanks for your reply 😊
Who did you apply with? 

And if you don’t mind my asking, were you in the overdraft? X

Our mortgage is with Natwest. It was a student overdraft that I was nearing the interest free term so I was in it pretty much constantly and then paid it off in one x

[Deleted User]

Kiwistrawb1990 said:

[Deleted User] said:

Kiwistrawb1990 said:

You'll be fine. I paid off a credit card and an arranged overdraft the same month we applied for our mortgage. All went through fine x

Hiya, thanks for your reply 😊
Who did you apply with? 

And if you don’t mind my asking, were you in the overdraft? X

Our mortgage is with Natwest. It was a student overdraft that I was nearing the interest free term so I was in it pretty much constantly and then paid it off in one x

That’s awesome you got your mortgage 😊
I’m sick with nerves at the thought of being declined. I’m kicking myself we didn’t get it paid off sooner. Lesson learned! 

I’m keeping everything crossed they’ll take our entire application into account xx

mortgagetakingages

Seriously don't worry. So long as you didn't go into unauthorised overdraft it really isn't a problem. Especially as its now cancelled. 

[Deleted User]

mortgagetakingages said:

Seriously don't worry. So long as you didn't go into unauthorised overdraft it really isn't a problem. Especially as its now cancelled. 

It did go £41 over the arranged overdraft limit on one occasion only. Thankfully it doesn’t show up as a late charge/fee, no direct debits were bounced back as money was put into the account the same day. 

In my heart of hearts, I fear they’ll look at that and say “not a chance” because, let’s face it, it looks so bad. 

That’s why we cancelled the overdraft, paid off two credit cards using some savings so his debt to income ratio is next to nothing now and his bank account has never looked better! 

mortgagetakingages

[Deleted User] said:

mortgagetakingages said:

Seriously don't worry. So long as you didn't go into unauthorised overdraft it really isn't a problem. Especially as its now cancelled. 

It did go £41 over the arranged overdraft limit on one occasion only. Thankfully it doesn’t show up as a late charge/fee, no direct debits were bounced back as money was put into the account the same day. 

In my heart of hearts, I fear they’ll look at that and say “not a chance” because, let’s face it, it looks so bad. 

That’s why we cancelled the overdraft, paid off two credit cards using some savings so his debt to income ratio is next to nothing now and his bank account has never looked better! 

This may be a problem depending on who you are getting mortgage from. You can't change it so i would advise you not to worry and let things work through. 

Beeboo23

I lived in my student overdraft and only paid it off just before my application which was approved. That purchase fell through for other reasons and I’ve now been approved for another mortgage a few months later. Also a FTB.