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  • FIRST POST
    • tain
    • By tain 7th Jul 17, 1:35 PM
    • 461Posts
    • 587Thanks
    tain
    Affordability Checks
    • #1
    • 7th Jul 17, 1:35 PM
    Affordability Checks 7th Jul 17 at 1:35 PM
    Does anyone know, or could give anecdotal evidence, as to which mortgage providers check 3 or 6 months of bank statements before giving a decision?

    The reason we ask is that we expected to be applying for a mortgage in 9 months or more (as we saved the deposit). Things have changed, and we may now be looking in 3 months.

    The thing is, last month was my wife's 30th, and the months before that my mother injured herself the other side of the country. In both instances, we spent way above and beyond what a normal month would be, and as such I'd imagine we'd fail affordability checks miserably. Even if we tried to explain the spending out, I can't see that working as we really went to town...

    So instead, we're spending the next 3 or so months tightening our belts and spending normally, so we look attractive to the banks. But we also want to get our mortgage ASAP as prices are slightly dropping, and more stringent affordability checks are on the cards. Therefore, the sooner we can apply, the better.

    But we don't want to knacker our chances by going to a bank and them offering us next to no money because we failed the checks, and then us having to go to other banks in the hope they'll lend us more money.

    So tl;dr - we've had a few bad months, we're now behaving, does anyone know of any banks we should avoid because their affordability checks go back 6 months or longer?

    Feel free to let me know if I've got this all wrong.
Page 1
    • tain
    • By tain 7th Jul 17, 1:38 PM
    • 461 Posts
    • 587 Thanks
    tain
    • #2
    • 7th Jul 17, 1:38 PM
    • #2
    • 7th Jul 17, 1:38 PM
    To give an example of our spending:

    A usual month would have us spending about £100-200 on 'stuff' like eating out, cinema, etc. We consistently spent this before the last few months (we could show the banks statements to show this, but if I were a bank, I'd still not believe it fully).

    Since about April, we've spent about £1000 a month on eating out, petrol, extra shopping, hotels, nights out at the pub, gifts, etc.
    • BattleToads
    • By BattleToads 7th Jul 17, 1:48 PM
    • 18 Posts
    • 10 Thanks
    BattleToads
    • #3
    • 7th Jul 17, 1:48 PM
    • #3
    • 7th Jul 17, 1:48 PM
    I think credit file/history and LTV also needs to be taken into account. My application with Nationwide was 80% LTV and they only requested the latest months statement.
    • tain
    • By tain 7th Jul 17, 1:52 PM
    • 461 Posts
    • 587 Thanks
    tain
    • #4
    • 7th Jul 17, 1:52 PM
    • #4
    • 7th Jul 17, 1:52 PM
    I think credit file/history and LTV also needs to be taken into account. My application with Nationwide was 80% LTV and they only requested the latest months statement.
    Originally posted by BattleToads
    Both our credit files are clear with no debt older than a few weeks in the last 6 years. We use our credit from time to time, on the electoral roll, etc. FWIW, we both score >900 on Experian. We're hoping that translates to a good showing on our applications.

    LTV will be around 90%, so on the cusp of needing to dig deeper I guess.
    • kingstreet
    • By kingstreet 7th Jul 17, 1:55 PM
    • 31,566 Posts
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    kingstreet
    • #5
    • 7th Jul 17, 1:55 PM
    • #5
    • 7th Jul 17, 1:55 PM
    Most lenders do not look at your bank statements to see if you went to Pizza Hut more than three times last month,

    They use them to ensure the amount on your payslips matches what was paid into your account.

    Some lenders don't even ask for them.

    The media hype about eating only beans on toast for three months before you apply for a mortgage is exactly, that - hype.
    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.
    • tain
    • By tain 7th Jul 17, 2:22 PM
    • 461 Posts
    • 587 Thanks
    tain
    • #6
    • 7th Jul 17, 2:22 PM
    • #6
    • 7th Jul 17, 2:22 PM
    Most lenders do not look at your bank statements to see if you went to Pizza Hut more than three times last month,

    They use them to ensure the amount on your payslips matches what was paid into your account.

    Some lenders don't even ask for them.

    The media hype about eating only beans on toast for three months before you apply for a mortgage is exactly, that - hype.
    Originally posted by kingstreet
    Yeah it really is the media that has put the fear of life into us.

    So are you saying with some confidence that my wild spending for a few months won't matter, and additionally it definitely won't affect the total amount the banks will lend us?
    Last edited by tain; 07-07-2017 at 2:25 PM. Reason: I should state that we'd be using a broker to assess the market first, so will be doing that ASAP if we can
    • debbie_debt
    • By debbie_debt 7th Jul 17, 2:25 PM
    • 274 Posts
    • 796 Thanks
    debbie_debt
    • #7
    • 7th Jul 17, 2:25 PM
    • #7
    • 7th Jul 17, 2:25 PM
    I'm glad I stumbled across this thread - we're soon to be applying for a mortgage much sooner than expected (in a similar way to OP). LTV should only be around 50%, so we're fortunate in that way, but our outstanding debt is around £13,000 which we've been trying to get rid of quickly by throwing every spare penny at it. Therefore, our bank accounts are drained as soon as we get paid. I hadn't even considered that they might go rummaging through our bank accounts!
    Emergency fund £435.09/£1000
    L.B.M. 21/09/2016 DEBTS = £30,854.38 28.06.2017 DEBTS = £13,880.68
    • amnblog
    • By amnblog 7th Jul 17, 2:33 PM
    • 9,503 Posts
    • 3,676 Thanks
    amnblog
    • #8
    • 7th Jul 17, 2:33 PM
    • #8
    • 7th Jul 17, 2:33 PM
    Lenders use Bank Statements to establish:-

    That your income is coming in as they expect
    That you are not paying debt that they don't know about
    That you are not in the habit of having DDM payments bounce

    They don't care if you shop at Prada or Primark.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, 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.
    • tain
    • By tain 7th Jul 17, 2:35 PM
    • 461 Posts
    • 587 Thanks
    tain
    • #9
    • 7th Jul 17, 2:35 PM
    • #9
    • 7th Jul 17, 2:35 PM
    Lenders use Bank Statements to establish:-

    That your income is coming in as they expect
    That you are not paying debt that they don't know about
    That you are not in the habit of having DDM payments bounce

    They don't care if you shop at Prada or Primark.
    Originally posted by amnblog
    That's hot stuff, thanks for confirming
    • NinaSwiss
    • By NinaSwiss 7th Jul 17, 3:00 PM
    • 186 Posts
    • 92 Thanks
    NinaSwiss
    I think credit file/history and LTV also needs to be taken into account. My application with Nationwide was 80% LTV and they only requested the latest months statement.
    Originally posted by BattleToads

    Though 2 years ago but also with Nationwide.
    My LTV was 75% and I was asked for 3 months statements.

    I had about 3 accounts with different banks and had to provide statements from all of them.
    Working towards:
    *House Purchase (2015)
    *Top-up pension (2016) *Clear CC (2016)
    *Mortgage
    Overpayment(50% LTV by Jan 2020) *Clear student Loan(by Jan 2020)*Saving for a Car purchase(2017)!
    *2017 DIY projects *Making the most of life!!!
    • User1312
    • By User1312 7th Jul 17, 3:29 PM
    • 19 Posts
    • 1 Thanks
    User1312
    My broker assured me they don't look at your day-to-day spending in detail at all. We've just been approved with Nationwide with 90% LTV, had to provide 3 months bank statements but it was just to check for any regular huge payments (talking in the 000's) that we hadn't disclosed, and check our pay income.

    I was worried as I went a few hundred into my agreed overdraft for 2 out of those 3 month's bank statements, we also both have betting transactions (around x10-15 £5-10 deposits per month), and we'd just booked a holiday. None of these were questioned and my broker said he didn't even notice them as they weren't huge amounts. Application sailed through and broker advised it would've done so with most lenders.
    • toc25
    • By toc25 7th Jul 17, 6:06 PM
    • 152 Posts
    • 158 Thanks
    toc25
    We went to Natwest, they looked through about 3 months of bank statements. Marking off the stuff that we have to pay (can't get rid of) and stuff that we could get rid of if we were struggling. She didn't seem too bothered about all my spending in shops and stuff. I was worrying about it for nothing, I think it's been over hyped personally.
    • toc25
    • By toc25 7th Jul 17, 6:08 PM
    • 152 Posts
    • 158 Thanks
    toc25
    Just too add she did say she was just checking that what we had told her about our outgoings matched up to our ststatements. Stuff like debt repayments and income.
    • tain
    • By tain 7th Jul 17, 6:50 PM
    • 461 Posts
    • 587 Thanks
    tain
    Cheers again everyone! I'll put the beans for dinner on hold for the time being!
    • Lauralou79
    • By Lauralou79 8th Jul 17, 6:38 AM
    • 75 Posts
    • 48 Thanks
    Lauralou79
    We were with Natwest and they did go through statements ( we also bank with them) and they did ask questions but just about regular payments and to check we had told them correctly about the credit etc ( we had none) our LTV was 43% and we weren't borrowing anywhere near what was our limit.

    Our friends went with HSBC and they were more thorough asking about how they would budget/spend for food, bills etc. So it really does vary between lenders

    Higher deposits always help so any spare money in the next few months, save it. Plus buying a house is always more expensive than you plan it to be!

    Good luck
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