Past overdraft

AndyDufresne

Hi,

I have an account with a £1000 arranged overdraft, that was being overdrawn by between £100-£200 consistently, for up until about 3 months ago. The account has been in positive by about £500 for the last 3 months ago. This is not my main account, it's a secondary one. I have about £15k-£20k for a deposit as a single applicant.

I'm looking to try and apply for an 85% LTV loan (to buy a £100k leasehold property). I have no other debts and have not had any debts before besides the overdraft. My questions are as follows:

1) Is this likely to be a big problem when applying for a mortgage? My monthly repayments would actually be a lot less than what I'm paying in rent now, so I don't think affordability would be a big issue; £85k should be well within what a lender would be willing to lend me (based on a 4.5x multiplier).

2) Should I reduce the arranged overdraft limit a couple of months before applying? Would this help my credit history?

MovingForwards

1. Shouldn't do now, just don't use it again until keys are in your hand.

2. Don't. Lenders don't know if it's you or the bank who reduces it.