Mortgage application and bank statements

JadeLouise

Hi All, had pur offer accepted on Tuesday then met with our broker yesterday who started our application process. AIP with Newcastle BS came back fine straight away. Of course we have to submit 3 months worth of bank statements but this is where im concerned.

As a background we are FTB, live with my partners parents, have no credit cars, loans or overdrafts.

My son is nearly 2 and about 6 months ago he was going to nursery which was £500 a month. My partners mother was the manager there so I would transfer her the £500 from our account with the reference "childcare fees". Suddenly the nursery got shut down and therefore my partners mother lost her job. Since then , we have had to pay her the £500 for rent (on top of the £150 we were already paying) that we would have been paying for nursery fees, because she still hasnt got a job and has no money for bills etc. She has been looking after our son during this time.

Stupidly I forgot to change the transfer reference so it still says childcare fees!!

My broker points out that the lender will see this reference and may refuse our mortgage because they take into consideration childcare fees , of which we dont actually pay and have said we dont pay, but just because I stupidly forgot to change the transfer reference it could go very bad.

Im so stressed I cant even sleep at night. Who said buying a hiuse was a good idea?

[Deleted User]

It does sound as if you are still paying childcare fees.

What would you do with your son if your partner's mother didn't look after him? It seems to be a permanent outgoing.

JadeLouise

If my partners mother was in work, we would send him to a childminder and in that case would be paying childcare fees to a childcare provider. If she wasnt in debt,we wouldnt need to be paying her bills for her with this £500.

I dont completely agree with the fact we are giving her this money in the first place. This last 6 months have been hell in every way I could imagine and the situation is complicated so I wont bore you with the details.

completely understand though that the lender will more than likely see this as childcare fees and wont so kuch as listen to an explanation that they have no obligation to believe. Just frustrating really

ACG

It looks to me like you are paying her for childcare also regardless of how you label it. If your child was going to the nursery, you would be paying the money there, but not money for bills/rent.

Now your child is not going to nursery, you are paying the grandmother... What happens if/when you move out? Do you stop paying the grandmother "rent" and start paying childcare to her or someone else?

If I was being paranoid, I would even say it could be seen as a tax dodge on behalf of the grandmother.

Get the broker to explain it to the underwriter. I would want to know prior to an application if they are going to class it as childcare or not.

If I was the underwriter I would. Likewise, if this case hit my desk, I would. If you were adamant it wasnt, I would want a letter from you and your partner confirming it wasnt. As the saying goes, if it looks like duck, swims like a duck and quacks like a duck...

jaelato1

Even if you had remove the 'childcare fee' reference, I still believe that your lender will question the regular £500 being transferred to someone else's account.

Thrugelmir

Didn't you declare the £500 outgoing on your application? Doesn't really matter who it's paid to.

marcmc84

Can you not go with Natwest? they don't take childcare fees into account. Also when you were paying the £500 to the nursery why didn't you send it through HMRC tax free childcare account and save 20% on the cost. Childcare is extortionate prices.

Id say they will class this as childcare costs so you may need to go to another lender.

marcmc84

Also who do you bank with? As when I printed pdf invoices off from Halifax it doesn't show the reference name I gave the payment - just said a payment to and name of receiver and the amount sent. You could then wait for them to ask then say its rental payment for living where you are.

ACG

marcmc84 wrote: »

Can you not go with Natwest? they don't take childcare fees into account.

That changes at the end of this week.
We had an email about it a couple of days ago.

marcmc84

Really, What about current applications that have been submitted but not passed through underwriting yet to be issued mortgage offer? Sorry I have a friend whos applied with them and they haven't had the offer yet

jaelato1

@marcmc I would imagine the new change will apply to those that applies after next week