Affordability Checks

tain

Does anyone know, or could give anecdotal evidence, as to which mortgage providers check 3 or 6 months of bank statements before giving a decision?

The reason we ask is that we expected to be applying for a mortgage in 9 months or more (as we saved the deposit). Things have changed, and we may now be looking in 3 months.

The thing is, last month was my wife's 30th, and the months before that my mother injured herself the other side of the country. In both instances, we spent way above and beyond what a normal month would be, and as such I'd imagine we'd fail affordability checks miserably. Even if we tried to explain the spending out, I can't see that working as we really went to town...

So instead, we're spending the next 3 or so months tightening our belts and spending normally, so we look attractive to the banks. But we also want to get our mortgage ASAP as prices are slightly dropping, and more stringent affordability checks are on the cards. Therefore, the sooner we can apply, the better.

But we don't want to knacker our chances by going to a bank and them offering us next to no money because we failed the checks, and then us having to go to other banks in the hope they'll lend us more money.

So tl;dr - we've had a few bad months, we're now behaving, does anyone know of any banks we should avoid because their affordability checks go back 6 months or longer?

Feel free to let me know if I've got this all wrong.

tain

To give an example of our spending:

A usual month would have us spending about £100-200 on 'stuff' like eating out, cinema, etc. We consistently spent this before the last few months (we could show the banks statements to show this, but if I were a bank, I'd still not believe it fully).

Since about April, we've spent about £1000 a month on eating out, petrol, extra shopping, hotels, nights out at the pub, gifts, etc.

BattleToads

I think credit file/history and LTV also needs to be taken into account. My application with Nationwide was 80% LTV and they only requested the latest months statement.

tain

BattleToads wrote: »

I think credit file/history and LTV also needs to be taken into account. My application with Nationwide was 80% LTV and they only requested the latest months statement.

Both our credit files are clear with no debt older than a few weeks in the last 6 years. We use our credit from time to time, on the electoral roll, etc. FWIW, we both score >900 on Experian. We're hoping that translates to a good showing on our applications.

LTV will be around 90%, so on the cusp of needing to dig deeper I guess.

kingstreet

Most lenders do not look at your bank statements to see if you went to Pizza Hut more than three times last month,

They use them to ensure the amount on your payslips matches what was paid into your account.

Some lenders don't even ask for them.

The media hype about eating only beans on toast for three months before you apply for a mortgage is exactly, that - hype.

tain

kingstreet wrote: »

Most lenders do not look at your bank statements to see if you went to Pizza Hut more than three times last month,

They use them to ensure the amount on your payslips matches what was paid into your account.

Some lenders don't even ask for them.

The media hype about eating only beans on toast for three months before you apply for a mortgage is exactly, that - hype.

Yeah it really is the media that has put the fear of life into us.

So are you saying with some confidence that my wild spending for a few months won't matter, and additionally it definitely won't affect the total amount the banks will lend us?

debbie_debt

I'm glad I stumbled across this thread - we're soon to be applying for a mortgage much sooner than expected (in a similar way to OP). LTV should only be around 50%, so we're fortunate in that way, but our outstanding debt is around £13,000 which we've been trying to get rid of quickly by throwing every spare penny at it. Therefore, our bank accounts are drained as soon as we get paid. I hadn't even considered that they might go rummaging through our bank accounts!

amnblog

Lenders use Bank Statements to establish:-

That your income is coming in as they expect
That you are not paying debt that they don't know about
That you are not in the habit of having DDM payments bounce

They don't care if you shop at Prada or Primark.

tain

amnblog wrote: »

Lenders use Bank Statements to establish:-

That your income is coming in as they expect
That you are not paying debt that they don't know about
That you are not in the habit of having DDM payments bounce

They don't care if you shop at Prada or Primark.

That's hot stuff, thanks for confirming :beer:

NinaSwiss

BattleToads wrote: »

I think credit file/history and LTV also needs to be taken into account. My application with Nationwide was 80% LTV and they only requested the latest months statement.

Though 2 years ago but also with Nationwide.
My LTV was 75% and I was asked for 3 months statements.

I had about 3 accounts with different banks and had to provide statements from all of them.

User1312

My broker assured me they don't look at your day-to-day spending in detail at all. We've just been approved with Nationwide with 90% LTV, had to provide 3 months bank statements but it was just to check for any regular huge payments (talking in the 000's) that we hadn't disclosed, and check our pay income.

I was worried as I went a few hundred into my agreed overdraft for 2 out of those 3 month's bank statements, we also both have betting transactions (around x10-15 £5-10 deposits per month), and we'd just booked a holiday. None of these were questioned and my broker said he didn't even notice them as they weren't huge amounts. Application sailed through and broker advised it would've done so with most lenders.