Getting our first mortgage

LegacyUser

Hi,

I'm going to a mortgage broker on monday as I've finally found a house I feel my partner and I can afford. I was told I would have to bring 3 months worth of bank statments with me... the problem is I have been overdrawn on two occasions over the last 3 months. It has never happen prior to this and was as a resuslt of me stupidly mixing payment dates up. Do you think this will affect my chances of getting a mortgage?

kazza23

I doubt it. When I got my mortgage 4 years ago I was overdrawn for about 2 full months of the 6 months bank statements I had to provide (although it was an agreed overdraft, I never went over my overdraft limit!

seamus

I don't think it'll be a problem if it's a standard overdraft facility - no worse than having a credit card which you've used once or twice.

LegacyUser

kazza23 wrote: »

I doubt it. When I got my mortgage 4 years ago I was overdrawn for about 2 full months of the 6 months bank statements I had to provide (although it was an agreed overdraft, I never went over my overdraft limit!

With respect, this is not 4 years ago! Its a totally different ball game now.

The answer depends on whether the overdraft is sanctioned or not.

If you went overdrawn beyond and unsanctioned limit it will definitely count against you, even in better times this is true.

However if you simply used your sanctioned overdraft facility and paid it back within the month, there may be no problem.

Dixie Chick

Its normally 6 months statements they ask for, are you okay to go back that far if they ask?

SarahJ

No I went only last month, depending on the bank, they usually need 3. To be honest at the moment, anything can affect you not getting a mortgage, including this. But most banks will give you a morgage if you have some money already ie a few grand.

kmick

Can I ask why you are using a broker?

Anything you need to know can be found on the internet and unless he can get you a better rate than AIB variable @3.25% (as at 12/02/2009) which they may further discount as a first time buyer, you should probably do the hard yards as regards figuring this out yourself.

http://www.mortgages.ie/index.cfm/spKey/first_time_buyers.html
Numerous calculators and info here.

LegacyUser

The problem is i don't have an overdraft I never felt I needed one (suppose I thought wrong!) I was literally overdrawn, once because my pay did not go in on the day it was due too and once because I got the dates screwed up in my head (forgot a bill was about to come out and withdrew money for a savings account....) Thing is I don't have time to wait another 3months to get approved, there is a fair bit of interest in the house I'm looking at. It's a rare find at the asking price.

LegacyUser

kmick wrote: »

Can I ask why you are using a broker?

I'm using a broker who is a close friend of my familly I've known him since I was born. As I said I'm in a rush to get approved. My plan was to wait until next year but the house is just what I'm looking for, location and cost wise not to mention that everything inside myself and my partner is screaming "buy it". We both work full time so I don't have time to apply to every bank individually I need things fast tracked.
If this deal falls through I will be waiting until next year.

unreggd

Best way to find out is to just go for it

The only alternative is to not apply for a mortgage, which would be pants

Good luck!

SarahJ

unreggd wrote: »

Best way to find out is to just go for it

The only alternative is to not apply for a mortgage, which would be pants

Good luck!

Exactly, all they can do is say no. And as I said, if you have a fairly good saving, you should be fine.

AIB turned me down cos the money I had wasn't my own, they like to see you taking money out and saving it yourself.

LegacyUser

unregworried wrote: »

The problem is i don't have an overdraft I never felt I needed one (suppose I thought wrong!) I was literally overdrawn, once because my pay did not go in on the day it was due too and once because I got the dates screwed up in my head (forgot a bill was about to come out and withdrew money for a savings account....) Thing is I don't have time to wait another 3months to get approved, there is a fair bit of interest in the house I'm looking at. It's a rare find at the asking price.

Oh sorry to hear that.

I dont think they will look to kindly on this Im afraid.

As for the problems with your bank account, the bank will view these errors as a black mark against you. The bank are basically looking to see how you manage money, the pay not going in was out of your control but they will construe this as your employer being unreliable and maybe having cashflow problems.

Messing up withdrawing money from an account and the direct debit bouncing is exactly the kind of thing that will be a big red flag for them too. They only want to give mortgages to people who can demonstrate a cast iron ability to repay the amount every month.

If they sense any kind of flakiness at all they will refuse you. For the future, look at your current account as a copybook you have to keep clean all the time, dont allow direct debits to bounce and dont go into an unsanctioned overdraft.

Although there may be a lot of people 'interested in the house' (if it was an estate agent that said this, you can merrily disregard this) they too may have difficulty qualifying for the mortgage and it may hang on the market for a while, other than that not much you can do.