Mortgage Application

homeless9

Hi people,

Just a few questions about a mortgage application I am about to do....

QUESTION 1: This may be a stupid question but I assume when they say they want 3 months bank statements - if I was to apply today - they'd want all account activity from the 23rd November through to today?

QUESTION 2: There are some payments on my account around the 23rd, 24th, 25th of November that would possibly be better if they were left off the statements, but it's probably just me being paranoid. I have a few 'larger' spends in the month up to Christmas so maybe it would be good to wait a few days before sending my statements to my broker so that I don't have to include a couple of them?  I am not talking massive amounts, but just a couple of £50 spends. Or does this not really matter as they understand it's Christmas time so spending goes up?

QUESTION 3: I don't know how much they take into consideration your spending habits in this 3 month period. Obviously if for example you are shelling out tonnes of cash down the pub, at the bookies, on fancy clothes - it's not a good sign, especially if say you're deposit is sub £10,000 and your income sub £25,000....

Basically, with me..... my spending on food is quite high and would not be sustainable if I was to take on this mortgage. It's high because I have not cared about what I spend on food as I have a huge amount of money in my bank account. If I was to take on a mortgage I could easily slash my food bill. I just wondered how open minded lenders are about your spending habits. Will they be like 'This dude spends a lot on food, but I see he has had a lot of money in his bank account for many  years so can understand he hasn't needed to worry about overspending'. Will they maybe ask me why me food spending is quite high and be happy with my answer, 'because I have a tonne of savings' ?.

or do they just go.....'this dude spends too much on food, I have to assume he will spend the same if I gave him the mortgage and therefore he will get himself in debt'.

I have no debt, I have the highest credit rating possible, I have a 50% deposit, I am buying on my own, no kids.

SameOldRoundabout

I’m not sure on the spending question, but in regards to the bank statement question if you don’t apply until 1st March (a week away) you can provide statements for December, January and February. They want full months anyway not exact days. They do make allowances for extra spending at Christmas time I know, but again I am not sure on regular overspending. 

anselld

You are over thinking it.  They are not interested in minute detail.  They just want to confirm income, see that you are not constantly overdrawn and not spending on gambling, etc or that you do not have regular outgoing debt payments which have not been declared.
Are you using a broker?  They should be familiar with the rules of any chosen lender and they should vet the statements before sending.

NewShadow

homeless9 said:

QUESTION 1: This may be a stupid question but I assume when they say they want 3 months bank statements - if I was to apply today - they'd want all account activity from the 23rd November through to today?

Three full months of statements as issued for all of your accounts - so depending on your bank that might be from 1st November, 1st December, 1st Jan - and then they might ask in a couple of weeks for from 1st Feb 

QUESTION 2: There are some payments on my account around the 23rd, 24th, 25th of November that would possibly be better if they were left off the statements, but it's probably just me being paranoid. I have a few 'larger' spends in the month up to Christmas so maybe it would be good to wait a few days before sending my statements to my broker so that I don't have to include a couple of them?  I am not talking massive amounts, but just a couple of £50 spends. Or does this not really matter as they understand it's Christmas time so spending goes up?

Banks understand it's Christmas - that's why they want three months: so they can see 'habitual' spending and contractual commitments, not so they can judge you buying lots of bubbly at Christmas  

QUESTION 3: I don't know how much they take into consideration your spending habits in this 3 month period. Obviously if for example you are shelling out tonnes of cash down the pub, at the bookies, on fancy clothes - it's not a good sign, especially if say you're deposit is sub £10,000 and your income sub £25,000....

You may have been spending a lot - but you've also been saving for your deposit and paying all your financial commitments, yes? That's the bit they care about. As long as your financial conduct has been 'good' - you've been paying off your cards in full/over minimum, you've not been late for anything I don't think they care about takeaways. 

I have no debt, I have the highest credit rating possible, I have a 50% deposit, I am buying on my own, no kids.

Credit rating is irrelevant - they care about credit history, financial conduct and affordability - and it doesn't sound like there's all that much to worry about.

If you wanted to, you could start living to your new budget now - mortgage payments plus saving into a slush/emergency fund, plus money do decorate/do up the new house. It would mean any future statements they request would be more disciplined - plus you'll save a lump more cash now... but either way I wouldn't stress about it too much. 

homeless9

NewShadow said:

homeless9 said:

Credit rating is irrelevant - they care about credit history, financial conduct and affordability - and it doesn't sound like there's all that much to worry about.

ok cool. Just a few things....

Credit history is fine, never missed any payments, all I have ever borrowed is on my credit card for about 2 or 3 years just to build up a credit history.

Ok, I won't worry about my food spending. Cheers. Ok....some other things that I may be worrying too much about are.....

Looking at my statements I have...

First Negative: 
November: 1 x £10 lottery payment.
January: 2 x £10 lottery payments and 1 x £10 Bet365 payments.

Averaging £13 a month on gambling.

Should I worry about these payments affecting me? before these 3 months I don't think I had any gambling payments for 10 months+. 

Second Negative:
My rental payments to my landlady haven't been on time for 2 of the 3 months by 1 day. Not because I didn't have the money, but because I forgot to pay. I don't have a bank transfer automatically set up so rely on my memory to pay on the 1st of each month. My landlord knows me well, I have lived here for 7 years and has had no issues with me and said they'd give me a good reference if I needed one. So it's a pretty casual and relaxed setup. I have never had the landlord chase me down for payments or struggled with the payments, just the odd one not been sent on the due date.

How do you think a lender will view this. Will they be checking with my landlord as to the date I am supposed to pay my rent?

Obviously it doesn't look great. I'd be setting up direct debits for mortgage paymetns so they are paid on the due date.

bucksbloke

Hi. I think you are overthinking lots of things. You will be ok. However, I think its really important that you set up a standing order for your rent! If you get a mortgage they will expect payment by direct debit. 

homeless9

bucksbloke said:

Hi. I think you are overthinking lots of things. You will be ok. However, I think its really important that you set up a standing order for your rent! If you get a mortgage they will expect payment by direct debit. 

ok, cool, this reassures me.

I just simply don't know how lenders view things.

I'd like to think all the positives I have going for me will outweigh the negatives...

50% deposit, managed to save a huge amount over the space of 10 years, credit history is perfect, landlord can give a good reference, no dependants, no debt, no contractual payments for phone, car, apps, netflix etc, have a bank account and credit card with this lender.....

v

£40 spent on the lottery/gambling over 3 months + a couple of slightly late rental payments.

Windofchange

The payments to your landlady won't make any difference whatsoever. The underwriters aren't going to know the ins and outs of your private arrangements for your rent. The gambling won't make an iota of difference either. It is about affordability. Spending 75% of your salary on gambling = problem. Using credit cards and running up debt to gamble = problem. Using 0.0002% or whatever of your disposable income to play the lottery every now and again, who cares. I recently got a mortgage with similar lottery habits - got approved start to finish in 6 days, so they can't have been worrying too long or hard about my 'gambling habit'. Food spending likewise. As long as you aren't running up huge debts at Michelin starred restaurants, not a problem. I submitted payslips for my recent successful mortgage application including my £60 a month costa coffee habit as a case in point. 

In short, you will breeze through the mortgage process without issue fro what you have put.

[Deleted User]

I ask for 4 months statements most of the time as then people end up giving 3 and a bit.  If I ask for 3 months I tend to get 2 and a half months or something.  

The thing is OP, brokers do some real horror cases. A million times worse bank statements than you can even imagine.  There are lenders out there that will give someone hundreds of thousands of pounds when I wouldn't give them a loan of a tenner. 
We know what lenders care about certain things and what lenders don't.  We also know which lenders don't ask for bank statements if it's coming from a broker.   
Ultimately I wouldn't think any lender would care how much maccy d's you eat or having a bet every once in a while but if there is something that needs to be taken into account, we know which lenders are best for this.

The reason we ask for so much information that the lender doesn't end up needing is so we know what's in the background and which lenders to avoid. 

In general, if a lender is looking at bank statements they are looking for:
Undeclared credit (loans to mum or a friend etc, stuff that doesn't show on credit report)
Undeclared maintenance 
Child benefit on bank statements but no children declared on application
Gambling 
General account conduct - more relevant if had debt repayment issues in the past as they want to see how you are now managing money.

If you are spending your own money on junk you don't need then that's fine.  If you are gambling up to the max of an overdraft then you might have a problem... But remember, it's only a problem if you are with a lender that wants bank statements for the case

homeless9

NewShadow said:

homeless9 said:

QUESTION 1: This may be a stupid question but I assume when they say they want 3 months bank statements - if I was to apply today - they'd want all account activity from the 23rd November through to today?

Three full months of statements as issued for all of your accounts - so depending on your bank that might be from 1st November, 1st December, 1st Jan - and then they might ask in a couple of weeks for from 1st Feb 

by 'as issued' do you mean as they are sent in the post to me (I receive them by post)?

I ask as I was just going to go to my online banking and select the dates from 1st November to end of January and create a PDF.

Am I not allowed to do it this way? do I need to scan in the actual paper statements sent to me and make a pdf from them?

Can anyone confirm this?

MovingForwards

@homeless9 what you are doing is transaction lists.

Your bank will do a bank statement each month on a certain date, that's the bank statements you need to provide.