MMR Queries

jakesuk

Hi all,

Any help / advice appreciated.....

1) Under the new MMR rules for lenders, how many bank and credit card statements would they expect to see? I have numerous bank accounts and credit cards which are all managed well - will they look at all?

2) How far back would they look? I'm just wondering whether a borrower could clean up their act 3-6 months before a mortgage application and the lender would not look back any further?

I appreciate (1) and (2) may vary from lender to lender.........

Thanks in advance

GMS

You answered your own question. It varies.

Even if a lender asked for example for 3 months they may ask for more should they have concerns.

Do you have a particular worry?

jakesuk

GMS wrote: »

You answered your own question. It varies.

Even if a lender asked for example for 3 months they may ask for more should they have concerns.

Do you have a particular worry?

I currently do not pay rent / mortgage so other than household bills I mostly (over)spend my income on eating out, clothes, holidays. I do save a modest amount but I could do much better if I needed to, I just have no need to at the moment because as I consider myself to be financially secure.

My concern is that a potential lender will see that currently I'm saving less than my projected monthly mortgage repayments and decline me (bearing in mind I don't have rent/mortgage right now).

I am just thinking that I could ramp up my monthly savings in the months prior to a mortgage application to demonstrate that I would be able to meet the mortgage repayments (which I am absolutely confident about). I'd have to rein in my spending when I have a mortgage anyway.

ACG

Its unlikely all but the most unreasonable of lenders would look at it like that.

Generally speaking banks will want 3 months statements potentially for all bank accounts. Obviously if you apply to your own bank they can see back years.

But I have known lenders to ask for 6 or 12 months statements pre mmr.

jakesuk

ACG wrote: »

Obviously if you apply to your own bank they can see back years.

I overlooked that! Very true indeed!

GMS

Credit reports will reveal overdraft use and show if it has been exceeded.

Where is your deposit coming from?

Are you really ready to take on a mortgage if you are spending more than you earn? Not a dig, a genuine question

jakesuk

GMS wrote: »

Credit reports will reveal overdraft use and show if it has been exceeded.

I have unused overdrafts on several current accounts. These overdraft facilities have never been used.

GMS wrote: »

Where is your deposit coming from?

I already have my deposit spread across several savings and current accounts. I'm topping it up (albeit slower than I could and should be doing)

GMS wrote: »

Are you really ready to take on a mortgage if you are spending more than you earn? Not a dig, a genuine question

I am not spending more than I earn. My current situation is that I am spending most of what I earn and saving a modest amount, without paying rent/mortgage. I could save much more. The modest amount I'm currently saving is not sufficient to cover mortgage repayments for the size of loan I'd be looking for.

Thrugelmir

jakesuk wrote: »

credit cards which are all managed well - will they look at all?

What do regard as well managed? Setlled in full every month. Or spend now or pay later.

amnblog

You won't know for sure until you apply but an experienced broker may be able to give you a view once they understand what they are working with.

I don't believe the lenders are at the ' save £1000 now or you can't afford a £1000 payment ' stage yet.

jakesuk

Thrugelmir wrote: »

What do regard as well managed? Setlled in full every month. Or spend now or pay later.

I have some credit cards which are on 0% deals so I make a little more than the minimum payment each month. Other cards are settled in full every month. I have never paid any interest on credit cards. However, when reviewing my credit files a lender would see that I have X amount of debt, although I would probably repay this debt prior to a mortgage application.

Thrugelmir

Lenders now can access a multitude of data on credit card usage. Trends with regard to outstanding balances, whether only minimum repayments are being made, if an account is 0% and so on.

If are intending to apply for a mortgage. Reducing the number of accounts you hold and the balances you owe can only be a good thing.