Bank Statements

NYClaire

What is it that mortgage companies look at on banks statements? How closely do they look at spending and what would be detrimental to acceptance? Tia

kingstreet

Undisclosed credit, unauthorised borrowing charges, bounced DDMs etc.

Net pay from payslip matches credit to bank account.

NineDeuce

Because you could tell them that you earn £10,000 so could afford a nice house, but then if your bank statement shows you spending £9,999 of this each time then they will start to wonder whether you can actually afford that £1 million that you are asking for....

NYClaire

But if you are spending your money within your means cause you have it to spend, is this still a problem? Is it better to always have money sitting in your account?

kingstreet

NYClaire wrote: »

But if you are spending your money within your means cause you have it to spend, is this still a problem? Is it better to always have money sitting in your account?

Spending your money is perfectly acceptable.

Lenders are looking primarily at net pay and account conduct as stated.

NineDeuce

NYClaire wrote: »

But if you are spending your money within your means cause you have it to spend, is this still a problem? Is it better to always have money sitting in your account?

Not necessarily on its own, because a mortgage is a long term commitment. What if interest rates go up? What if you lose your job? What if you become ill? What if an unexpected expense happens?

scotgal30

This is my worry when applying for a mortgage next month, my partner transfers me all the money for bills/ savings etc and the money he has left is ‘spending money’ but will they look at it like that? Odd £5/10 on skybet per week is spent and shows on his statement, he’s not getting bank charges and he’s not going over his overdraft but it’s always a worry. When applying for a mortgage you need to make yourself look attractive so sometimes it’s worth being careful with your account transactions 4 months prior to applying. Unfortunately we have to apply next month or we could face losing our new build so I’m trying to stay positive!!

kingstreet

The suggestions to eat only beans on toast for the three months before a mortgage application are rubbish and were discredited soon after MMR in April 2014.

I submit hundreds of mortgage applications a year and all I look for on bank statements are credit commitments, unauthorised borrowing charges, bounced DDMs and the salary payments match the payslips.

I would be concerned at multiple gambling transactions adding up to hundreds a month, or recent payday loan activity but nothing much else is an issue.

I don't recall ever having a lender come back and question discretionary spend on the run-up to the application. The level of micro-management some people think necessary is just wasted energy and is unlikely to affect the outcome.