Have i ruined my future? Help me feel better?

Td3reaper

Hi everyone!  First of all sorry for the wall of text, but please bear with me.

So i'm currently going through the first time buyer process, with a help to buy mortgage through a specialist adverse lender due to fair/poor credit and a few missed payments on file.

Anyway, i got the formal offer and exchanged contracts a few weeks back. Once the contracts where exchanged i thought great i can relax now. NOPE! I have been reading horror stories of lenders pulling out between exchange and completion and now i'm having trouble sleeping!

The reason i'm so stressed is because i feel like i have given the lender every opportunity to pull out here. The rate i was given a few months back when i applied, was 3.4%, if i was to apply now this would easily be in the 6%, so really important i don't lose this offer and rate right..

Now this is where i think i'm F'ed.

The reason for me purchasing the new house was due to a recent breakup from a long term relationship. 

Anyway me and the ex had a joined bank account, which had an arranged overdraft of £2.5k.

I went down the bank and took her name off this joined account, at which point they got me to sign a credit agreement to obviously keep the £2.5k overdraft but just solely in my name, obviously i thought nothing of it at the time, i hadn't exchanged yet either and was just in offer stage.

Anyway, as i had already had all my bank statements approved and had my mortgage offer, i didn't think anything of it, i thought i was clear of the "being good" stage not thinking they might ask statements again near completion.

Anyway, i've dipped in and out of this overdraft for the last 2 months, sometimes being at the top end of the £2.5k. It's always getting paid back and has been zero'd fully before the end of each month and has yet to show as being used on my credit file (£0 balance, i assumed because i clear it end of every month)

The problem is it looks absolutely horrendous on the bank statements, being in the minus so much and letting it fluctuate like it has.

And here is the kicker, i have just been told i may need to extend my mortgage offer, as it expires a week before they are looking to complete on the new build, broker has asked for 3 months statements and payslips to put in an extension when needed... FFFFFFU!

So here i am, with an agreed overdraft newly in my name which wasn't there on full application, and frequently dipped into throughout the month, sometimes maxed.

The only reason i can think i might be ok, is that i am borrowing around £150k less than i am able to afford, so this doesn't screw my affordability at all.

Sorry for the wall of text, i hope there is someone knowledgeable or a broker around that can give me some good news.. lol 

Thanks a lot

which1982

Yeah, agree. 

Loads of buyers need to extend their mortgage offer and don’t end up getting their deal pulled. I’m not a broker but would have thought that you’d be fine with a small overdraft if affordability is generally ok.

Windofchange

Sounds to me as if you are living in your overdraft - I.e your Monthly salary brings you back to zero and you then live in that all the way to 2.5k under again. If everything passed originally then what has changed? Did you have the mortgage approval done pre changing the overdraft? I don’t think that having the overdraft in your name solely is going to be an issue unless you are really close to the affordability limits which from what you’ve put you’re not. You’ve in essence taken on another couple of grand of debt and that’ll have nil impact I don’t reckon. 

Only you can answer to the sensibility of what you’re doing now buying a house when it would appear you are struggling to make ends meet? 

JMA74

Is your useage any different to when you first applied?  You still had the overdraft back then 

A lot of lenders dont really care that you use an overdraft as long as you stick to agreed limits.  If you have gone over the limit then might be an issue

What lender is this with? 

ACG

Chances are all things considered you will probably be fine. 
However, if you were borderline on the credit score or affordability then it could be a problem. 

It is impossible for anyone to say anything. Just explain it to your broker and see what they say but best to get the extension request in sooner rather than later as if it is a problem it gives the broker longer to find an alternative. Failing that, could you not push to complete before the offer expires? 

Td3reaper

I read that first comment then went to work in a foul mood. 

The lender Is precise mortgages who for some reason only gave me a 3 month offer.

Yeh so the overdraft wasn't declared or there when the full application was put in and accepted, this is a new addition since the offer, sorry I didn't make that clear.

Although I have maybe read that precise only require payslips for an extension offer and not necessarily bank statements, is this true does anyone know?

The overdraft I have told my broker about and they said it will likely be fine just don't use it (oops) but I know it doesn't screw my affordability just looks messy and bad. 

As ACG has said I think I need to apply for the extension the moment I can which is 4 weeks before expiry (not yet) 

If they decline me and I have to find a new lender, I dont think I fit affordability for double the rate or its tight, which means I'm liable to lose my entire deposit to the builder.

Thanks all so far 🙈

JMA74

Are you buying a new build property?   Precise offers for new build properties should be valid for 6 months.  If a non new build product was selected then it would be valid for 3 months. 

Td3reaper

JMA74 said:

Are you buying a new build property?   Precise offers for new build properties should be valid for 6 months.  If a non new build product was selected then it would be valid for 3 months. 

Yeah it was an off plan new build.

Only gave me 3 month 😐

Do you know if they ask for bank statements for extensions usually?

JMA74

Last one i had to extend with them was around the start of summer and they asked for 1 payslip and 1 bank statement.  He was paye employed client.   Odd that you havent got the 6 months though as the criteria states:

New Build Offer Validity 

New Build offers will be valid for 6 months from the valuation date

Td3reaper

Only one month bank statement? I won't need to apply for an extension for a few weeks and the OD won't be used so I may be OK there.

And yeah, I am going to speak to my broker monday and find out why I only got 3 months which was going to force me to extend either way.

I guess my biggest fear is that they will not extend me on a 3.4% at this time.

Do you think I will still have an option to apply for a new lender if precise pull the rug? What with the adverse credit and now OD usage, I don't know who else would lend, helps that it's a 75% LTV I guess.

K_S

Td3reaper said:

Do you think I will still have an option to apply for a new lender if precise pull the rug? What with the adverse credit and now OD usage, I don't know who else would lend, helps that it's a 75% LTV I guess.

@td3reaper With a fresh H2B application, the problem you might come up against is that lenders are likely to be withdrawing their H2B product lines soon, to allow applications to proceed and complete in line with the scheme withdrawal deadline. I had notifications from a couple of lenders re a 31 Oct deadline for H2B apps.