Bank Statements & Mortgage Application..

Morning all,

Got an appointment at the bank this weekend, and have got myself a bit concerned about them looking at bank statements. What exactly do they look for? I only ask because I spend a fair amount.

By this I mean, I moved back into the parents house and am fortunate enough to be living rent free. Therefore I have enjoyed having expandable income, and spent it most months (usually leaving around £50 leftover). Saying this, I have never gone overdrawn, and all out goings (Car finance, insurance, phone bills etc) have always gone out. I just haven't "saved" if that makes sense. I've never spent more than has gone in, just always spent most of that has.

Thanks for any advice.
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Comments

  • glentoran99
    glentoran99 Posts: 5,821
    First Anniversary Combo Breaker First Post Debt-free and Proud!
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    They look at your spending, and will assess affordability from you spending, its entirely possible you will be asked for more details on money going out of your account
  • MK__2
    MK__2 Posts: 23 Forumite
    It all depends on how much you are looking to borrow and what your LTV is, but I would imagine they are going to be interested in whether you are going to be able to afford your repayments, and whether your lifestyle will allow it. You might need to convince them that you'll be making lifestyle changes accordingly. Some lenders might consider you too risky.
    i.e. if you currently spend 50% of your disposable income on going on travel and holidays, because you can, you arent going to able to do that when you've got to spend that money on your mortgage repayments. My globe-trotting cousin had this problem.
  • b4rn5ey
    b4rn5ey Posts: 8 Forumite
    They look at your spending, and will assess affordability from you spending, its entirely possible you will be asked for more details on money going out of your account

    Well judging by this, surely it's pointless me even turning up, as they wont lend to someone who is left with £50 each month, when the mortgage is say, £500..:rotfl: how annoying, easily sort able in time, just stop spending in on random things, just frustrating as found a house now.
  • b4rn5ey
    b4rn5ey Posts: 8 Forumite
    MK_ wrote: »
    It all depends on how much you are looking to borrow and what your LTV is, but I would imagine they are going to be interested in whether you are going to be able to afford your repayments, and whether your lifestyle will allow it. You might need to convince them that you'll be making lifestyle changes accordingly. Some lenders might consider you too risky.
    i.e. if you currently spend 50% of your disposable income on going on travel and holidays, because you can, you arent going to able to do that when you've got to spend that money on your mortgage repayments. My globe-trotting cousin had this problem.


    Frustrating really, it's as simple as I spend it because I can, if i was paying £500 a month mortgage, I wouldn't spend it on random stuff :rotfl:
  • MK__2
    MK__2 Posts: 23 Forumite
    b4rn5ey wrote: »
    Frustrating really, it's as simple as I spend it because I can, if i was paying £500 a month mortgage, I wouldn't spend it on random stuff :rotfl:

    You might find some lenders who are prepared to work with you, but I bet the rates wont be as favourable.

    My advice - get a savings account, set up a standing order and put approx the amount you expect to be spending on a mortgage each month into it. Do this for a few months and it will help you save your deposit and get you into the habit of knowing how much real disposable income you'll have when you are a house-owner.

    also - follow the guides on MSE about boosting your credit file, which will help make you more attractive to lenders.

    Sounds boring? but hey, welcome to being a grown up. Give it a few months, and if you decide you cant cope on a budget, then at least you'll have a pot of cash you can take down to the casino / department store / betting shop for a blow-out :rotfl:
  • b4rn5ey
    b4rn5ey Posts: 8 Forumite
    MK_ wrote: »
    You might find some lenders who are prepared to work with you, but I bet the rates wont be as favourable.

    My advice - get a savings account, set up a standing order and put approx the amount you expect to be spending on a mortgage each month into it. Do this for a few months and it will help you save your deposit and get you into the habit of knowing how much real disposable income you'll have when you are a house-owner.

    also - follow the guides on MSE about boosting your credit file, which will help make you more attractive to lenders.

    Sounds boring? but hey, welcome to being a grown up. Give it a few months, and if you decide you cant cope on a budget, then at least you'll have a pot of cash you can take down to the casino / department store / betting shop for a blow-out :rotfl:

    Already got the deposit from years of saving, and I know I can definitely live on the budget, as I'm on the same income and used to rent privately (for more than the mortgage repayment will be), plus i'll have my partners income on top of it too. I've just gone a bit mad spending the last 6 months due to being fortunate enough to have the spare cash lol.
  • glentoran99
    glentoran99 Posts: 5,821
    First Anniversary Combo Breaker First Post Debt-free and Proud!
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    b4rn5ey wrote: »
    Well judging by this, surely it's pointless me even turning up, as they wont lend to someone who is left with £50 each month, when the mortgage is say, £500..:rotfl: how annoying, easily sort able in time, just stop spending in on random things, just frustrating as found a house now.



    Not really, as I said you will more than likely be asked to explain numerous cash withdrawals for example
  • MrMortgages
    MrMortgages Posts: 12 Forumite
    Speak to a good broker, I have helped clients in much worse spending situations than your own. They are looking at more than just day to day spending, showing you have taken on credit (car finance) and kept up timely repayments will help. You may have to justify certain transactions, but you needn't worry as long as there is a plausible explanation.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • kingstreet
    kingstreet Posts: 38,690
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    There are several lenders who don't request bank statements at all.

    Many use ONS figures for expenditure and the media hype about eating only beans on toast for three months on the run-up to a mortgage application was largely that - hype.

    Brokers have plenty of options for those who have reasonable lifestyles. If you want to go to HSBC or Yorkshire BS, that's upto you. You will have to jump through their varied and oft-changing hoops...
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • LuckyG
    LuckyG Posts: 226 Forumite
    b4rn5ey wrote: »
    Already got the deposit from years of saving, and I know I can definitely live on the budget, as I'm on the same income and used to rent privately (for more than the mortgage repayment will be), plus i'll have my partners income on top of it too. I've just gone a bit mad spending the last 6 months due to being fortunate enough to have the spare cash lol.

    If you've been saving for years then that proves that you can be sensible with money. I recently received my offer with Nationwide (also bank with them).
    I have been putting about £500 in savings every month, transferring about the same into my husbands account for bills, about £100 on my car and spending the rest on my pets, evenings out, day trips etc. I usually have under £30 left in my account each month and my account activities were not questioned.
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