Santander HTB Mortgage (Bank Statements)

atmosworld

Hi, I really could do with some quick advice. (I have provided background info)

My wife and I went to see a new build last week. There was a mortgage adviser onsite who we took advice from. After speaking to him we decided to reserve one of the houses and decided to go with the advice as he seemed very knowledgeable. We sat down with him and explained that we would need to have the Help to Buy loan and we can put down a 5% deposit. He said that was all ok and the best deal for us would be Santander...

The Help to Buy application we through last Monday and he contacted us yesterday saying he got an AIP from Santander and he would be posting some forms to us (we were relived a both myself and my wife only have 'good'-ish credit score).

Our problem is....He said they would need 3 months bank statements. Now my wife and I have just recently had our first child and over the past few months have spent a lot of money on her, which has meant each month we have gone into our OD (Mine is £450 but the most i went into was £320 last month) and my wife is (£500) which she used up last month. We are really worried that this shows us going into our OD every month and scalping buy, but this is not the case. It was simple a one of thing (ok, 3 month thing - very bad timing on our part). If they asked for statements from 6 months ago it would be very different.

We can easily afford the mortgage repayments and even stressed-tested ourself at 6.7% and we can still afford it and not living of baked beans!

We so want to get this house but our hopes have all but gone as we are so worried they will look at our bank statements and say we have stretched ourself each month.

Should be be realist and expect a decline?

Thrugelmir

Doesn't paint a good picture. As you appear to be living pay cheque to pay cheque. With no savings to support you in an emergency situation. Why didn't you use your savings to fund the expenditure?

Affordability looks at the longer term. A 25 year mortgage requires 300 monthly on time payments. So your assessment of what constitutes affordable and that of a lender will most certainly differ.

amnblog

You should not 'expect' a decline but an application with Santander can be bumpy.

Is one of you on maternity or paternity leave? That is an additional complication. If you cannot prove you have the cash to cover any temporary drop in earnings, that is more likely to cause an issue with Santander.

Speak to your broker.

atmosworld

Hi,

First - Sorry about all the spelling mistakes/ typos in my original thread! (I’m dyslexic)

Savings - I have been putting back £300 per months into a savings account for the past 2 years. It is an account that I have to give 30 days notice on and I get reasonable interest on it. We did think about using the savings but our OD is interest-free. We were planning on paying off the OD over the next 2 months (our surplus will do this) so at the end of November we would not be using either OD at all. Thus, the use of OD was not costing us anything in loss interest on our savings.

Affordability – With mortgage repayments to be £1050 (fix for 5 years), House bills and expenditure, car costs (petrol) and all other expenditure. My wife and I would on an average month have a joint surplus of £550. We thought this would be enough to show we can afford the repayments (even a rise in the future – we were going to put £150 a month into a savings account specifically to help cover any future increase in in payments / house needs. (I will no longer be putting £300 a month away as this money will now be part our surplus).

Santander – Why are they ‘bumpy’?

Timing – I know it seems odd, but we thought we would not be buying a house for another year and before we did we would ‘tidy’ up our spending a few months before . However we live in a small rural village (we rent at £700 pcm) and the new houses perfect for what we want. My wifes dad has also given us a gift to pay for the deposit and stamp duty.


Thank you for the response. I guess it is a game of wait and see

roubaix

Worth noting also that they will factor in childcare costs which allow you and your wife to continue with whatever employment you do now. I only have one baby and what banks were happy to lend me last month when she was factored in when compared to if I was single was quite a lot less. Thankfully I only wanted to borrow about half of what they were happy to offer so it didn't impact on my property choice. I guess they also know that children get more expensive as they get older.

amnblog

atmosworld wrote:

Santander – Why are they ‘bumpy’?

In our experience they nearly always find something to query at some point.

ethank

I am in my overdraft for a few days by up to a 1/3 of my monthly salary and there were no issues when my bank statements were reviewed by NW. I was also HTB-EL.

atmosworld

ethank - I take it everything went ok. I have had the OD on my account since I opened it 4 years ago, but I have only use it a handful of times, 3 of those were in the past 3 months.

Should I cancel my OD or is it to late (will it help - I am more than willing to pay it off using my savings).

I did a little more research on the web (and on MSE) and there seems to be conflicting views, some people say they were turned down due to going in to their OD near the end of each month and other people say they got a mortgage with no questions asked, although they are in their OD most months.

Would it help if i explained that the OD can be paid immediately if needed, or do banks simply see things at 'black and white' and it does not matter as on all 3 bank statements we have gone into our OD (normally about the 20th-30th of each month).

Advice:
1 - Cancel OD today (in fact I have just been paid so current balance +£1700 - I prob won't go into OD this month at all)
2 - explain to bank that i can pay it off asap if they need to
3 - leave it as it is - its too late