Please reassure me - mortgage application!

[Hunterschicken]

I'm applying for a mortgage with my dh. We currently have a largish mortgage but are moving and need to increase it. We are hoping to borrow about 2/3 of what we would be able to lend based on our decision in principle, so very affordable.

The issue is - I'm on mat leave, go back in January. Have had a year off so not being paid now. Not an issue as I have a letter from work which verifies my salary etc. Dh and I have individual bank accounts and a joint account from which we pay all our bills, and put spare cash into as the interest rate is better than individual accounts. I paid all my bonuses into here to cover my spends during mat leave. This account has more than £10k in it. I tend to use both accounts, keeping as much cash as possible in the joint account because of the interest.

The last two months I accidentally went into my overdraft in my individual account, through being a bit careless with which debit card I used. It's an agreed overdraft facility which I never use as I have savings in the other account. When I noticed I just topped it back up again from the joint account.

The mortgage company have asked for bank statements and I am now panicking they will see an overdrawn amount and refuse our application?! Surely they will look at both accounts and see we have ample cash? Or speak to me about it?

Any underwriters on here that can reassure me that I've not made a massive cock up and they would look at Our cash position across all three accounts?

It'll be fine. They're looking at your overall ability to pay back the money - what you earn, regular income. The fact you've dipped slightly into overdrawn on one account is neither here nor there.

By the way, I'm not an underwriter but have applied for mortgages 5 times now and have been overdrawn on several occasions.

Thank you alicemalice. Feels ridiculous to worry about it but I find the whole process really stressful!

alice I'm assuming at least 4 of your 5 mortgage applications must have been before the MMR rules came into force last year.

You can't say 'it'll be fine' anymore.

It may very well not be fine.

Lenders do not look favourably at all on borrowers using overdrafts- it indicates poor financial management in their view.

Some lenders may turn down an application based on this- others might not.

A mortgage broker will be best placed to advise you given your full circumstances, the overdraft is just part of that.

I'm a mortgage adviser and I would not think twice about you going into an agreed overdraft briefly.
Lenders look at bank statements to make sure you're not consistantly using an unauthorised overdraft and incurring charges. Also to check the are no regular outgoings you haven't declared.
Honestly don't worry.

That's interesting eminybob

Do you work for one lender or whole of market?

The MSE forum is full of posters who get a DIP then get turned down upon application and the only adverse factor they have is use of an approved overdraft (completely accept that people posting on there generally only do so when it goes wrong!)

As I said above, it is only one factor in the application but it may and does tip some applicants the wrong way if their case is borderline.

I just work for one lender tbh so suppose I shouldn't be speaking on behalf of all.

But we are supposed to be one of the stricter ones.

I guess what I am hoping is that my case isn't borderline, given we are borrowing much less than the 'maximum' and our cash position is >£10k. And given I am currenly on mat leave and will start getting paid again in 3 months? So affordability based on my total cash position is fine, it's just one of three accounts wasn't topped up from the other.