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Chance of getting a mortgage with overdrafts etc

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  • 19-11-2019 9:14am
    #1
    NearlyForty
    Registered Users Posts: 113 ✭✭


    Was hoping to maybe get a bit of advice here or others experiences, on mortgage applications..?

    So we’ve been preparing ourselves with a view to buying in the next few months. We had been aiming off for March/April of next year, after we cleaned up our accounts, clear an overdraft of e1000 that we each would have etc..only a house that we love and had been watching on Daft.ie dropped it’s price significantly last week setting me into a panicky spin as that house is now well within our budget on an affordability factor but also we have saved well over the deposit amount as well. So, even though we have deposit saved, and more, our rent and bills are paid on time, we have no credit cards or loans (they were all cleared early) we still have overdrafts, that we’d never clear say in the next few weeks but we have decided we’re going to chance it and take the plunge now. Just to mention we also fit the lending criteria and are looking for well below our income limits of e160k. We have an appointment booked with a broker for this Thursday and a viewing for that house booked for Friday (after speaking with the auctioneer we have found out why the house has dropped in price)
    Are we mad..?? In your experience will the banks laugh at us with a current account, that could do with a spring cleaning?! I know the broker will prob best advise us, but I would like to hear of others experiences too

    Thank you!!


Comments

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    #2
    lawred2
    Registered Users Posts: 24,267 ✭✭✭✭lawred2


    If you have the deposit saved and cleared all loans and credit cards, how have you not cleared that measly overdraft?

    Sure chuck some savings into the overdraft and it's gone.


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    #3
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    Reading your post, I’m also wondering why you are struggling to pay an overdraft if you have savings? The interest charged on the overdraft will be more than the interest paid on your savings. You will be asked about the overdraft by both broker and banks.


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    #4
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Thirded.

    Edited to add... are your savings in non accessible deposit accounts?


    I'd say go for it, the bank will understand you could not access your deposits. But, as above, get rid of your O/D regardless ASAP.


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    #5
    NearlyForty
    Registered Users Posts: 113 ✭✭NearlyForty


    Very true.. But I thought I also had to not touch our savings leading up to the application? So if I was to take money out of it to clear our overdrafts, would that go in our favour..?
    I know it seems fairly obvious, but I also was trying not to touch the savings
    Thanks for your replays


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    #6
    NearlyForty
    Registered Users Posts: 113 ✭✭NearlyForty


    [Deleted User] wrote: »
    Thirded.

    Edited to add... are your savings in non accessible deposit accounts?


    I'd say go for it, the bank will understand you could not access your deposits. But, as above, get rid of your O/D regardless ASAP.

    Our savings are in the credit union, so I can access it. I was just afraid that if I went in to take money out they may frown upon that? I always thought you needed to leave your Savings alone and not touch it
    Thanks


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    #7
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    NearlyForty wrote: »
    Very true.. But I thought I also had to not touch our savings leading up to the application? So if I was to take money out of it to clear our overdrafts, would that go in our favour..?
    I know it seems fairly obvious, but I also was trying not to touch the savings
    Thanks for your replays

    Mortgage lenders assess your ability to pay off debt. If you have a car loan, it is a loan agreed with bank and paid off in arranged monthly installments. An overdraft is different, it is effectively short term temporary credit and should be paid off as quickly as possible because the interest rate is very high. An overdrafts suggests you are not able to budget, an overdraft while you have savings in another account looks strange.


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    #8
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    NearlyForty wrote: »
    Our savings are in the credit union, so I can access it. I was just afraid that if I went in to take money out they may frown upon that? I always thought you needed to leave your Savings alone and not touch it
    Thanks

    Any lender will be happier to see you pay off a debt than taken money from a savings account.


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    #9
    Wildly Boaring
    Registered Users Posts: 3,629 ✭✭✭Wildly Boaring


    As part of a couple who spent the last 5 or 6 years keeping an eye on houses....

    When you're not in a position to go there will be the perfect house at the perfect price.

    Once you're good to go it will feel like you're settling.

    Want what you can't have type of thing.

    Any lender will want to see min of 6 months of bank accounts. So clear the overdraft in the morning. You may still have an issue right now I'm afraid.


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    #10
    NearlyForty
    Registered Users Posts: 113 ✭✭NearlyForty


    Dav010 wrote: »
    Any lender will be happier to see you pay off a debt than taken money from a savings account.

    Okay, thanks so much for both your replies. It makes perfect sense. I’ll sort it out today :)


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    #11
    lawred2
    Registered Users Posts: 24,267 ✭✭✭✭lawred2


    NearlyForty wrote: »
    Very true.. But I thought I also had to not touch our savings leading up to the application? So if I was to take money out of it to clear our overdrafts, would that go in our favour..?
    I know it seems fairly obvious, but I also was trying not to touch the savings
    Thanks for your replays

    it would seem prudent to clear a debt that costs more than the interest earned on your savings


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    #12
    NearlyForty
    Registered Users Posts: 113 ✭✭NearlyForty


    Wildly Boaring wrote: »
    As part of a couple who spent the last 5 or 6 years keeping an eye on houses....

    When you're not in a position to go there will be the perfect house at the perfect price.

    Once you're good to go it will feel like you're settling.

    Want what you can't have type of thing.

    Any lender will want to see min of 6 months of bank accounts. So clear the overdraft in the morning. You may still have an issue right now I'm afraid.

    We’re all new to this, yet I know it could all not work out. I’m going to clear the overdrafts today and chat with the broker on Thursday. Even if we’re not ready per se, I’m sure he’ll show us what we do need to do for now and go from there. What’s meant to be will be as they say


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    #13
    NearlyForty
    Registered Users Posts: 113 ✭✭NearlyForty


    lawred2 wrote: »
    it would seem prudent to clear a debt that costs more than the interest earned on your savings

    Never thought of that


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