Agreement in principle, surprised so low

itsthelittlethings

Exodi said:

itsthelittlethings said:

Just to give you some idea, the offer was not even double my salary.

I'd imagine it's the overdraft... that's a enormous red flag to be honest.

Personally I wouldn't even think about a mortgage while you're still using it.

It’s a 0% overdraft.

Exodi

itsthelittlethings said:

Exodi said:

itsthelittlethings said:

Just to give you some idea, the offer was not even double my salary.

I'd imagine it's the overdraft... that's a enormous red flag to be honest.

Personally I wouldn't even think about a mortgage while you're still using it.

It’s a 0% overdraft.

A lender doesn't see this, plus it looks you look like you're struggling financially - which is obviously of concern when homeowners can randomly incur £3k bills out of nowhere as their boiler dramatically gives up one day.

itsthelittlethings

Exodi said:

itsthelittlethings said:

Exodi said:

itsthelittlethings said:

Just to give you some idea, the offer was not even double my salary.

I'd imagine it's the overdraft... that's a enormous red flag to be honest.

Personally I wouldn't even think about a mortgage while you're still using it.

It’s a 0% overdraft.

A lender doesn't see this, plus it looks you look like you're struggling financially - which is obviously of concern when homeowners can randomly incur £3k bills out of nowhere as their boiler dramatically gives up one day.

Do you think I could just pay it off and ask my bank to close the overdraft or would being close to £0 in my bank account have the same effect?

MattMattMattUK

itsthelittlethings said:

Exodi said:

itsthelittlethings said:

Exodi said:

itsthelittlethings said:

Just to give you some idea, the offer was not even double my salary.

I'd imagine it's the overdraft... that's a enormous red flag to be honest.

Personally I wouldn't even think about a mortgage while you're still using it.

It’s a 0% overdraft.

A lender doesn't see this, plus it looks you look like you're struggling financially - which is obviously of concern when homeowners can randomly incur £3k bills out of nowhere as their boiler dramatically gives up one day.

Do you think I could just pay it off and ask my bank to close the overdraft

You do not need to get rid of the overdraft, you just need to stop using it.

itsthelittlethings said:
or would being close to £0 in my bank account have the same effect?

At this stage the lender cannot see what you have in your account, or if it is your bank will not be using that information, only when they ask for bank statements and it gets reviewed ahead of approval would they look at that level of detail.

Get out of your overdraft, clear any other debts and speak to an independent broker.

Hoenir

itsthelittlethings said:

Exodi said:

itsthelittlethings said:

Just to give you some idea, the offer was not even double my salary.

I'd imagine it's the overdraft... that's a enormous red flag to be honest.

Personally I wouldn't even think about a mortgage while you're still using it.

It’s a 0% overdraft.

Is this your only debt / financial committment ? 

itsthelittlethings

Hoenir said:

itsthelittlethings said:

Exodi said:

itsthelittlethings said:

Just to give you some idea, the offer was not even double my salary.

I'd imagine it's the overdraft... that's a enormous red flag to be honest.

Personally I wouldn't even think about a mortgage while you're still using it.

It’s a 0% overdraft.

Is this your only debt / financial committment ? 

I also owe £1400 on a credit card.

amnblog

This sounds like you have simply completed the affordability calculator with the Lender incorrectly.

If you want to know the correct figure simply speak to the Lender or a good Broker.

ACG

There is a problem here. 2x income would only be applicable if you had a handful of kids, were 50+ and/or had a lot of debt. 

The overdraft is not ideal but its not a problem and wont be the cause of this. 

As amn says, you need to speak to the lender to get them to help you work out the problem, or speak to a broker who will be able to do it all for you. 

StephenMortgages

Broker here - it really depends who you got the agreement in principle with. 

Some providers treat commitments and income differently and the amount you can borrow varies across the different lenders quite a lot. We have lenders that lend an awful lot more if you are willing to go on a 5 year fixed higher rate. 

There are so many different variances so I wouldn't necessarily take one agreement in principle as the final picture. 

itsthelittlethings

StephenMortgages said:

Broker here - it really depends who you got the agreement in principle with. 

Some providers treat commitments and income differently and the amount you can borrow varies across the different lenders quite a lot. We have lenders that lend an awful lot more if you are willing to go on a 5 year fixed higher rate. 

There are so many different variances so I wouldn't necessarily take one agreement in principle as the final picture. 

It was after a “financial health check”. The person doing it sounded about 25.