How much to lenders actually assess spending?

In_For_A_Penny_2

Just wondering outside of the regular monthly outgoings - how much to lenders look at recent bank statements etc for "one-off" purchases?

My broker says that the media have vastly overstated this as a being an issue and he has never seen any problems so long as people don't go overdrawn etc.

We are currently in the middle of an application to Halifax and I was slightly shocked when my wife printed off her recent bank statements. I think there was an amazon purchase every other day for the last 3months! It's not that we can't afford the things being purchased and they were mainly in expectation of buying a new home, but I am conscious it looks pretty bad to a lender.

Senior_Paper_Monitor

Your broker is pretty much 'on the nail'.


If you are standard lending (not consolidating gazillions etc), and no warning signs (living in overdraft etc) then underwriters have better things to do than question your unhealthy interest in collecting china pigs or star wars memorabilia.


Generally, affordable discretionary spend in the pub is just that - discretionary spend.






Mind you, if the picture is different, once their interest is spiked they will be over it like a rash

lizards

I have bank statements not entirely dissimilar to your wife's as we had to apply in a hurry and hadn't been keeping "clean" in terms of non-essential purchases. Amazon features highly!

NatWest said absolutely nothing about it and we have our mortgage offer. They were more concerned with my husband's income and the various complications than on our outgoings. However we do have reasonably good affordability and clean credit and no loans or overdraft living. Despite purchases like you state we were still able to save a decent deposit in two years and I suppose that's all they care about.

It's as the post above says I presume.

(yes, I worried too especially as it was 95%! Broker said not to and he was right!)

Jon_B_2

Good to read this. Our full mortgage offer is about to go in. I always deposit about £800/month into savings, but on the bank statement it is just a load of numbers as the recipient as it is an account with the same bank. Will underwriters know that the transfer is into savings and not actually paying anybody?

MissBizzita

I've recently received an offer from Halifax.

My three months bank statements were far from conventional and included an expensive holiday in New York plus numerous one off purchases - Amazon, meals out etc. There was also authorised overdraft use for a month - though this was paid off in full and not touched for the past two months.

My affordability was tight (4.9 x salary) but Halifax (to my amazement!) didn't question a thing!

My LTV is 60% so not sure if this helped. Oh and no defaults at all on credit file.

damianmcr

Reading this thread has made me relax a little. I've just started actually saving but when I apply in June I will only have saved around £700. I was worried that before this I was regularly spending what money I had and the lender would look badly on this. I do have an arranged overdraft but I've had this for years and never exceed the allowed amount.

In_For_A_Penny_2

Good to hear other's experiences. I had been deliberately using an alternative account for discretionary spending in the lead up to the mortgage application just in case - I had assumed my wife had been doing the same or cut back a bit, alas she forgot we had this conversation at Christmas.

The little brown amazon boxes in the bin should have been a warning sign!

Fingers crossed.

amnblog

In_For_A_Penny wrote: »

We are currently in the middle of an application to Halifax and I was slightly shocked when my wife printed off her recent bank statements. I think there was an amazon purchase every other day for the last 3months! It's not that we can't afford the things being purchased and they were mainly in expectation of buying a new home, but I am conscious it looks pretty bad to a lender.

It looks pretty bad to spouse!


We had one client whose bank account showed she was making five or six purchases from takeaways, pubs, restaurants, and coffee shops every day - cruising from one to the other.


The Lender was happy with it, her doctor, perhaps less so.

audigex

At the end of the day what people spend their money on isn't the concern, whether they can afford the mortgage is. It's only where the two overlap there's likely to be concern: heavy gambling etc.

To some extent I imagine the lender likes to see an amount of discretionary spending: because that's exactly the spending we'd be able cut out if interest rates rise. If my repayments went up by £100, the first thing to go would be meals out and Costa Coffee (other overpriced hipster coffee franchises are available)