Worried they won't offer us mortgage based on expenditure.

Puddlesplasher

We have recently sold our house and had an offer accepted on our dream house.

We are going to port our existing mortgage with the Woolwich and borrow a considerable amount more. Our total borrowing will be 3.2 x combined annual income. We have no other credit committments and pay our credit card off in full each month.

We have been asked to provide a payslip each and a bank statement to prove our income. However our most recent bank statement is not typical of our expenditure due to a holiday and money spent on new carpets before we put our house on the market. The net result is that it looks like we have only £200 a month left over. Our new mortgage payments will be over £600 per month more than we are currently paying.

In peoples experience will the Woolwich make a judgement on our expenditure or do they purely want to see our salary going in and that there is nothing like loan payments? Apart from worrying the chain is going to collapse I am now worried that we will not get the mortgage!

Mrs_Bumble

When is your next bank statement due?

Alternatively send them a couple of months with a note to explain that you had paid for a holiday etc and wasn't a typical month.

I would try not to worry too much.

getmore4less

They probably only want to see the salaries but might look at CC payments etc.

You can always give them more than one months statements.

Another option is to back up the payslips and bank staements with a SOA that shows your real spending/allocation of money.

This will even out the main spends over the year and show if you are saving for medium/longer term stuff as well

If you don't have one you need to do one anyway to be sure you an afford the place.

here is a usefull template
http://www.makesenseofcards.co.uk/soacalc.html

dwsjarcmcd

May not be too bad a thing. How many people buy carpets on their bank account, rather than putting it on their credit card? I would suggest not that many.
I think the suggestions from Mrs Bumble and getmore4less about sending more than one bank statement are very wise.

David

Puddlesplasher

Thank you all for your suggestions. Will order another bank statement but suspect that will also not be typical and we had more house related expenditure before putting on the market (was worth it as got an offer on the second day of being on the market)

Keep thinking about everything that could go wrong but until the bank statements arrived yesterday I hadn't even considered that we might not get the mortgage! House buying is too stressful!

LeeSouthEast

You can write a covering note to explain 'out of band' expenditure, so don't worry too much. If they ask for 3 months, send 6. Openness will go a long way.

Mips

Well a holiday is not monthly expenditure.. they will class it as discretionary.

They want to lend to you, as much as you want them to lend to you, so perhaps if you explained the situation and perhaps offered them a few months worth of statements you will be fine.

If you have loans for longer than 12 months, and they assume a percentage of your credit card bill usually as monthly expenditure.