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Mortgage approval - will overdraft affect me

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  • 10-09-2011 5:37am
    #1
    jimbojonez
    Registered Users Posts: 22 ✭


    hi all, hope some one can help me just about to apply for mortgage approval and as I look through my statements i see that i have been in and out of my overdraft for the past 6 months!!! so my question is will I get a mortgage if all the other criteria for mortgage approval is fine but my overdraft in my current account is in the red half the time?


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    #2
    DrPhilG
    Registered Users Posts: 12,328 ✭✭✭✭DrPhilG


    As far as I know, it shouldn't affect you as long as it was an agreed overdraft. You didn't actually do anything that would affect your credit history.

    On the other hand it might suggest that you are strapped for cash and can't afford a mortgage. Do you have any savings?

    I've just been turned down for a mortgage on the basis of not being able to show any regular savings recently so if you have been putting a regular amount away then I don't think it will affect you.


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    A mortgage will reduce the overall amount a lender is willing to lend you, and may affect the approval process, if you can't show that the overdraft was for funding expenditure other than day-to-day living expenses.

    In the first instance you *need* to clear the mortgage- this will increase the net amount you can borrow- you need to then show a history of savings.

    Unfortunately (or fortunately depending on how you look at things) times have changed, and indeed lending criterion are evolving almost on a day-to-day basis. The one constant in all of this- is lenders are becoming more and more risk averse, and despite their advertisements, are not in the market of handing out mortgages to any but the most creditworthy of potential customers. You need to manoeuvre yourself into this category.


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    #4
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Id say yes it will seriously impact you.

    Perhaps this is to obvious. If you have an overdraft that indicates you have no savings i.e no point in applying for a mortgage.

    If you do have savings in one account and an overdraft in another. That would still ring alarm bells that you cannot manage you rmoney in such a way that you require an overdraft.

    Without anynmore detail Id imagine you wouldnt get any kind of mortgage.


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