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19-11-2019, 08:14   #1
NearlyForty
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Chance of getting a mortgage with overdrafts etc

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!!
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19-11-2019, 08:17   #2
lawred2
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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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19-11-2019, 08:25   #3
Dav010
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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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19-11-2019, 08:30   #4
Chinese whospers
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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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19-11-2019, 08:35   #5
NearlyForty
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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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19-11-2019, 08:36   #6
NearlyForty
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Originally Posted by Chinese whospers View Post
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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19-11-2019, 08:40   #7
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Quote:
Originally Posted by NearlyForty View Post
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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19-11-2019, 08:41   #8
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Originally Posted by NearlyForty View Post
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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19-11-2019, 08:44   #9
Wildly Boaring
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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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19-11-2019, 08:45   #10
NearlyForty
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Originally Posted by Dav010 View Post
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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19-11-2019, 08:45   #11
lawred2
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Quote:
Originally Posted by NearlyForty View Post
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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19-11-2019, 08:55   #12
NearlyForty
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Quote:
Originally Posted by Wildly Boaring View Post
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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19-11-2019, 08:58   #13
NearlyForty
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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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