Will this affect our mortgage application?

FitzWilliams

We weren't planning on buying until next year. I looked at the market some months ago and nothing seemed to be coming up so gave up on the idea. Fast forward this week an amazing property has come up which we've been accepted for and put an application through our bank for. We've been splashing the cash so to speak as we didn't think we would be buying this year, so the last 3 months of bank statements shows some excessive spending. Two holidays booked and paid for, a lot of takeaways and some expensive food shops. We still managed to put £400 away in our H2B ISA and paid down some credit card bills. Will the overspending for the last 3 months affect our mortgage application?

Neutrinno

FitzWilliams wrote: »

We weren't planning on buying until next year. I looked at the market some months ago and nothing seemed to be coming up so gave up on the idea. Fast forward this week an amazing property has come up which we've been accepted for and put an application through our bank for. We've been splashing the cash so to speak as we didn't think we would be buying this year, so the last 3 months of bank statements shows some excessive spending. Two holidays booked and paid for, a lot of takeaways and some expensive food shops. We still managed to put £400 away in our H2B ISA and paid down some credit card bills. Will the overspending for the last 3 months affect our mortgage application?

Of course it will, it will affect how the underwriter will assess your case and whether he/she thinks you have to much general outgoings to sustain mortgage payments should rates rise etc. Depending on how bad your statements look you may of been better spending low for a couple of months before applying.

FitzWilliams

I understand what you're saying. It's just the general things that we spent money on were things that could be cut back on if the rates went up. If we were tight on money the priority would be to pay our mortgage rather than go on holidays for example. We would be paying less money on travel by moving as well. It's just sad because I know that we can more than afford the mortgage and have never missed a payment for anything. Had I known a house would be coming up I would have nipped the spending in the bud.

Thrugelmir

FitzWilliams wrote: »

and paid down some credit card bills.

Have you added to your debt overall with your excessive spending? Or was this funded out of disposable income.

swishy87

I very much doubt it so don't worry. There's always someone on here who will put fear into you but it's wasted worrying. We've just completed on our new house and wasn't expecting to move. When we put our application in we had some bad bank statements (pub frequently, etc) but I very much doubt they go through all this tbh, they are just checking that you've covered all your major outgoings in your application. I'm sure they understand everyone spends within their means and 'cuts their cloth' when they have to.

amnblog

Lenders are interested in regular outgoings not discretionary spend.


If you choose to line Gordon Ramsey's pocket today, this does not mean you will do so when you cannot 'afford to'.


Key issues are:


Do the records show you pay your bill in full and on time
Do the records show you stay within credit or OD limits with your Bank
Do the records show your expected income and non-discretionary outgoings make this mortgage affordable.

csgohan4

swishy87 wrote: »

I very much doubt it so don't worry. There's always someone on here who will put fear into you but it's wasted worrying. We've just completed on our new house and wasn't expecting to move. When we put our application in we had some bad bank statements (pub frequently, etc) but I very much doubt they go through all this tbh, they are just checking that you've covered all your major outgoings in your application. I'm sure they understand everyone spends within their means and 'cuts their cloth' when they have to.

The lenders base the outgoings generally on ONS figures but your case is not the same as everyone elses, do you know the OP's exact figures??? We're not here to give people false hope.


What you think the lenders understand is very much different to what is in their criteria. Living on beans and toast will not suddenly mean the lender will give you more.

FitzWilliams wrote: »

We weren't planning on buying until next year. I looked at the market some months ago and nothing seemed to be coming up so gave up on the idea. Fast forward this week an amazing property has come up which we've been accepted for and put an application through our bank for. We've been splashing the cash so to speak as we didn't think we would be buying this year, so the last 3 months of bank statements shows some excessive spending. Two holidays booked and paid for, a lot of takeaways and some expensive food shops. We still managed to put £400 away in our H2B ISA and paid down some credit card bills. Will the overspending for the last 3 months affect our mortgage application?

You have paid 'some' credit card bills? How much debt are you in ? How much deposit do you have?

Neutrinno

swishy87 wrote: »

I very much doubt it so don't worry. There's always someone on here who will put fear into you but it's wasted worrying. We've just completed on our new house and wasn't expecting to move. When we put our application in we had some bad bank statements (pub frequently, etc) but I very much doubt they go through all this tbh, they are just checking that you've covered all your major outgoings in your application. I'm sure they understand everyone spends within their means and 'cuts their cloth' when they have to.

Because every application is the same..

kingstreet

Which lender please?

FitzWilliams

The house is a new build for 155000. Almost 10% deposit of 15,000 and 1000 remaining on credit cards now. We will also be Using the 20% equity loan. We spent the last 3 months paying £600 a month off these. We've also tucked away £400 for the last 3 months in the ISA so that should 'free up' £400 a month when we get a mortgage. Take home pay is £2500 total and after paying our credit cards and ISA we've spent all of it the last 3 months. But again this was on luxuries and not based on committed expenditure. We have dependants but pay no childcare costs just food.

FitzWilliams

It is Natwest