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Can You Get a Mortgage When You Are Overdrawn?

Due to the large expense of purchasing a house, mortgage lenders require a very thorough application process.

Before you attempt to apply for a mortgage loan, take the time to examine all of your financial accounts and statements. If you are overdrawn in any of your bank accounts that may pose an issue.

Overdrawn Account

If your bank account is overdrawn it means that you have allowed it to fall to a negative balance. This commonly occurs due to a charge, withdrawal or check payment that exceeds the balance.

For as long as the account is overdrawn, you technically owe a debt to the bank. If the account remains overdrawn for a long period of time, the bank can submit the debt to credit reporting agencies.

Correct the Issue

Before you can finalise a mortgage loan, in most cases the lender will ask you to fix an overdrawn account. You must pay any fees along with the deficit amount to bring the account balance to at least zero. If you cannot pay off the deficit that could cause a mortgage underwriter to deny or delay the loan.

Bank Account History

When you submit documentation to supplement a mortgage loan application, the lender commonly requires at least two full bank statements for all open accounts containing every statement page available.

The lender uses these bank statements to look at your account activity over the past two statement periods and also to confirm your account balance.

When evaluating you for a loan, the bank looks at all credit factors, including how you manage bank accounts. If the bank discovers a pattern of overdrafts on your account, that could make it more difficult to close the loan.


Do not attempt to apply for a mortgage loan until you have fully resolved the overdraft issue. It is wise to then wait at least another two to three months after the issue is cleared up to apply since a mortgage underwriter commonly looks at the last two bank statements when making a decision.