Agreed overdraft and mortgage application

Keliz

I appreciate that there are other factors, but wondering if anyone can put my mind at ease?

I am applying for a mortgage next week, we are using the help to buy scheme, so will need to borrow 85% off lender.

I’ve never been great with saving or money and my partner has saved the majority of the deposit.

my last three bank statements show the following:
statement 1 : into agreed over draft £500
statement 2 : into agreed over draft £13
statement 3 : in credit 

I have now cancelled the overdraft.

I have a credit card with a £4500 limit, it currently has £500 on it, but it will be cleared by the application.

Will any of this, especially the overdrafts concern lenders? Has anyone been in a similar position?

L_T_88

I was in a similar situation. Statements supplied showed me "in" my arranged overdraft (Was £1,000, then reduced to £500) around half of the month. Explained to the broker the overdraft would be cancelled before exchange at the latest. Lender (Leeds) I assume were happy with this as got our offer today. Depending on your lender and other circumstances I'd say you'll be fine.

Rudi1990

I currently have an application in with Aldermore, I have a £1200 agreed overdraft that I go into every month.  Once my rent and bills come out after my salary has gone in and cleared it, im back into it. My mortgage advisor called me yesterday as they are questioning my overdraft usage on the statement that was sent with the application and they have requested statements for the two previous months - as they will also show me in my overdraft I have a feeling I’ll get declined 😕.
I thought use of an agreed overdraft was fine, as long as you don’t exceed it but I think underwriters are being more picky at the moment.
Hopefully it will work out for both of us 🤞🏼

Thrugelmir

Rudi1990 said:

I thought use of an agreed overdraft was fine, as long as you don’t exceed it but I think underwriters are being more picky at the moment.

Nothing picky about questioning overdraft usage. General assumption will be that personal finances aren't very well managed. Use savings to clear the overdraft. Why pay interest you have no need to. 

Rudi1990

Thrugelmir said:

Rudi1990 said:

I thought use of an agreed overdraft was fine, as long as you don’t exceed it but I think underwriters are being more picky at the moment.

Nothing picky about questioning overdraft usage. General assumption will be that personal finances aren't very well managed. Use savings to clear the overdraft. Why pay interest you have no need to. 

Yes, I understand that thought process, think I focussed too much on saving a deposit and clearing my credit cards 😕 I had read that agreed overdraft usage isn’t usually a problem, kicking myself now.

Keliz

Rudi1990 said:

I currently have an application in with Aldermore, I have a £1200 agreed overdraft that I go into every month.  Once my rent and bills come out after my salary has gone in and cleared it, im back into it. My mortgage advisor called me yesterday as they are questioning my overdraft usage on the statement that was sent with the application and they have requested statements for the two previous months - as they will also show me in my overdraft I have a feeling I’ll get declined 😕.
I thought use of an agreed overdraft was fine, as long as you don’t exceed it but I think underwriters are being more picky at the moment.
Hopefully it will work out for both of us 🤞🏼

Have you had anything back from them? @Rudi1990

Rudi1990

Keliz said:

Rudi1990 said:

I currently have an application in with Aldermore, I have a £1200 agreed overdraft that I go into every month.  Once my rent and bills come out after my salary has gone in and cleared it, im back into it. My mortgage advisor called me yesterday as they are questioning my overdraft usage on the statement that was sent with the application and they have requested statements for the two previous months - as they will also show me in my overdraft I have a feeling I’ll get declined 😕.
I thought use of an agreed overdraft was fine, as long as you don’t exceed it but I think underwriters are being more picky at the moment.
Hopefully it will work out for both of us 🤞🏼

Have you had anything back from them? @Rudi1990

Hiya, yes my mortgage advisor contacted me on Friday to advise the valuation has been instructed, he had asked for the valuation to be done after underwriting as Aldermore usually do it first (because it’s a £370 fee and my case was extremely touch and go) so he has said as long as the valuation goes as expected I should get a mortgage offer 😊 any update from your side?

Ros3s1

Rudi1990 said:

I currently have an application in with Aldermore, I have a £1200 agreed overdraft that I go into every month.  Once my rent and bills come out after my salary has gone in and cleared it, im back into it. My mortgage advisor called me yesterday as they are questioning my overdraft usage on the statement that was sent with the application and they have requested statements for the two previous months - as they will also show me in my overdraft I have a feeling I’ll get declined 😕.
I thought use of an agreed overdraft was fine, as long as you don’t exceed it but I think underwriters are being more picky at the moment.
Hopefully it will work out for both of us 🤞🏼

Hi

Not sure if you will see this but did you end up getting your mortgage offer under this circumstances. In a similar position with Aldemore. Also how many months bank statements did u have to send in the end, was it more than 3 months?

thanks 

Chooru

Did your advisor not prepare for this in advance?

I go into my overdraft every month also (I have a £2000 approved overdraft and go £300-500 in every month. My mortgage broker wrote a cover letter explaining it when the application was submitted, and it was never questioned.