Worrying about passing Mortgage Affordability

MoneyEM

So I am just about to apply for a mortgage, but I'm worried that I might not pass the affordability checks, I do pretty much all of my spending on my credit card and pay it off in full every month (I get cashback on some purchases like travel & supermarket with Santander) so there will be very little visibility of where my money goes aside from my payment of rent & bills.

Am I allowed to supply the corresponding credit card statements when applying? Also, I've just been on holiday (costing £1500) which shows me as spending more than I'm earning. Also, I have just started a new job so my income for December is not representable of a normal month. 2 or 3 of my last 3 bank statements show me as spending more than I'm making... although I'm not using an overdraft as my deposit is sitting in there.

Can I also supply statements that show that some months I spend a lot less?

I know I should have cut down on my spending on the run up to applying but now just feels like a good time and I'm eager to get on the ladder before the prices go up too much and I can't afford to buy in my preferred area anymore. Last year prices went up by more than 15%.

HappyMJ

There's no need to cut your spending. They'll use average figures for expenditure plus and commitments you have such as loan payments, child support and whatever is not part of normal spending on your bank statement. They don't add up hundreds of transactions to work out exactly what you spend.

questionss

I would expect 3months payslips to be needed so you may need to wait if your new job is in a new company etc.

MFWannabe

Getting a mortgage will depend on a lot of factors including spending pattern, salary, deposit you have based on the amount you wish to borrow etc.


You are a first time buyer so I would suggest you speak to an independent mortgage broker and they will be able to answer any questions you have and know who are the best lenders to approach for you.

kingstreet

You do not have to eat only beans on toast for the three months before a mortgage application. This was post-MMR media hype.

Most lenders do not care what you spend. They tend to only note;-

credit
maintenance
childcare
ground rent & service charges
season ticket travel loans
student loans

and these are taken with an average based on your sized household compiled from ONS stats.

questionss

We applied direct to HSBC. Our bank statements were looked through very closely. Everything was categorised, all supermarket monies totted up, lifestyle stuff, meals out, lottery tickets, holiday payments, everything. They added up all the cash withdrawals too.

kingstreet

questionss wrote: »

We applied direct to HSBC. Our bank statements were looked through very closely. Everything was categorised, all supermarket monies totted up, lifestyle stuff, meals out, lottery tickets, holiday payments, everything. They added up all the cash withdrawals too.

That's why I said "most lenders" not all.

There are one or two who feel the need to analyse to the nth degree.

Fortunately, most don't.

matchboxfull

We applied with nationwide. Like you we do all or spending on a credit card and pay it off in full each month. I mentioned this several times during the application process but they weren't bothered. They looked at one bank statement and didn't want to see the credit card statement.

csgohan4

questionss wrote: »

We applied direct to HSBC. Our bank statements were looked through very closely. Everything was categorised, all supermarket monies totted up, lifestyle stuff, meals out, lottery tickets, holiday payments, everything. They added up all the cash withdrawals too.

HSBC are different, they are a very risk adverse lender, they have some of the best rates, but also have some of the strictest criteria

amnblog

questionss wrote: »

We applied direct to HSBC. Our bank statements were looked through very closely. Everything was categorised, all supermarket monies totted up, lifestyle stuff, meals out, lottery tickets, holiday payments, everything. They added up all the cash withdrawals too.

If you want their bottom end rates you have to submit to this forensic nonsense. Did they check the points on your clubcards?

questionss

amnblog wrote: »

If you want their bottom end rates you have to submit to this forensic nonsense. Did they check the points on your clubcards?

To be fair the scrutiny & treating us as an individual rather than relying on standard figures actually really suited us. They were one of only a few lenders that would consider us due to other factors (contractor, only just 1 yr trading, previous years income from overseas, I'd only been back in uk 6mth)

IMO not that risk adverse as long as affordability there