Mortgage applications & investment impact

whatstheplan

I have 1 x residential and 3 x BTL mortgages.  I remortgage each of them every x years to remain on fixed term, lower rate etc.

I've read that people are having mortgage/remortgage applications refused or much more closely scrutinised if the applicant invests in crypto.  That alone has me slightly concerned as I'm considering dabbling in crypto as per my other post in the investment section.

However, crypto aside, do investments in general create any additional complexities with lenders when applying for a mortgage/remortgage?  Does it negatively impact stress tests etc due to the lender seeing you as more of a risk taker?

ACG

It probably depends on what you are doing. 
If you are paying money in and out each week/month then some lenders may treat it similar to gambling. It may be worth setting up a separate account and avoid transferring money back and forth if you can. If you are just putting money in/out once a month then it may not be too bad. 

whatstheplan

ACG said:

It probably depends on what you are doing. 
If you are paying money in and out each week/month then some lenders may treat it similar to gambling. It may be worth setting up a separate account and avoid transferring money back and forth if you can. If you are just putting money in/out once a month then it may not be too bad. 

I should remember given the amount of remortgage applications I've done, however do lenders ask for information on all your accounts or just the one you intend to use to fund the mortgage?  I have what I class as my main account that services my expenses, has DD's set up etc.  I also have (with the same bank) another account that I've not used for years.  I was already thinking of transferring a small amount to it each month to use for day to day purchases.  So if I used that as my investment account, the lenders wouldn't ask for its details as it's not the account that'll fund the mortgage, right or wrong?

K_S

@whatstheplan I'll second what ACG said, try avoiding using your main account (showing income and regular expenses) for your crypto transactions.

I've just recently had a bit of a mare with a resi remo client who had 'Coinbase' transactions on it. The values involved had no material impact on the application but the frequency (money going in and out a few times a months) just spooked an underwriter who probably doesn't know much about crypto (neither do I, I must add!).

whatstheplan

K_S said:

@whatstheplan I'll second what ACG said, try avoiding using your main account (showing income and regular expenses) for your crypto transactions.

I've just recently had a bit of a mare with a resi remo client who had 'Coinbase' transactions on it. The values involved had no material impact on the application but the frequency (money going in and out a few times a months) just spooked an underwriter who probably doesn't know much about crypto (neither do I, I must add!).

Thanks.  Whether I go crypto and/or traditional investment route, do you think it suffices to keep my investment activity in a separate account but that is with the same bank as my main account?  I think this is part of the issue, because crypto is a relatively new market with lots of horror stories (and a fair amount of misinformation around e.g. people using it are usually criminals etc) established financial institutions are wary of it as are financial advisors ... no offence!   And as you've touched on, knowledge about it is still lacking.  However being wary is better than being caught out!

Whilst it's legal to buy crypto in the UK, other crypto activities have been banned by the FCA.  Most UK lenders have banned customers from using credit cards to fund crypto transactions, that however seems sensible to me.  Unfortunately, as you've touched on regarding a customer, even when people are staying within the rules, when lenders see crypto broker names on statements, it sets the alarm bells ringing.  I think that's unfortunate if the applicant is very obviously just transacting small sums. 

ACG

Some lenders will ask for all statements, some may only ask for all if they can see money going back and forth. 
Thats why I would suggest just keeping them separate and trying to avoid moving money across each month if you can. The less they have to do with one another the better as.

I put money into crypto last year, not a lot and I dont do it monthly I just put an amount it. It will sit there until I become rich/lose it all or just get bored and pull it out. Hopefully I will do a  50 cent and forget about it and then realise I have a few millions in there but I am not holding my breath. 

KS - theres not much to understand. Some random computer picks out a random number and thats how much it is worth. 10 minutes later it will lose 15% and then 10 minutes later it will gain 32%. Its mental how much it changes in 24 hours. Its like having my 3 year old telling me how much my money is worth and we all know how often they change their minds.