How best to manage budgeting prior to mortgage application when using e-savings budgeting pots

gettingthehangofthis

Hello MSEers,

I have a mortgage in principle and hope to find a place to buy in the next couple of months at which point I'll be progressing with the mortgage application.

I budget using the 'pots' method – I pay each monthly budget into different e-savings accounts (Nationwide), and then repay my debit account / credit card immediately from the relevant pot after buying food/petrol etc, and also keep a track of my spending. This budget method works well for me, but it probably looks a bit weird on my statement as I'm constantly moving around small amounts of money in my accounts (and also to an external CC + savings account not with that bank).

Is this ok for when I apply for the mortgage, or will it look bad and look like I have loads of outgoings? I currently save a good chunk of my salary so I'm not overspending in the slightest but wondered if it's best to use a different budgeting method to prep for the application as they ask to see bank statements.

Thank you so much in advance 

user1977

Moving funds between your own accounts is normal, they're not going to get confused when they look at it.

housebuyer143

gettingthehangofthis said:

Hello MSEers,

I have a mortgage in principle and hope to find a place to buy in the next couple of months at which point I'll be progressing with the mortgage application.

I budget using the 'pots' method – I pay each monthly budget into different e-savings accounts (Nationwide), and then repay my debit account / credit card immediately from the relevant pot after buying food/petrol etc, and also keep a track of my spending. This budget method works well for me, but it probably looks a bit weird on my statement as I'm constantly moving around small amounts of money in my accounts (and also to an external CC + savings account not with that bank).

Is this ok for when I apply for the mortgage, or will it look bad and look like I have loads of outgoings? I currently save a good chunk of my salary so I'm not overspending in the slightest but wondered if it's best to use a different budgeting method to prep for the application as they ask to see bank statements.

Thank you so much in advance 

They only problem I faced was using multiple accounts and moving money into two different savings accounts and then out and in again....

I ended up having to print about 100 pages across all accounts and highlight each transaction and into what account it was going as the lawyer couldn't make head nor tail of it for money laundering purposes.
They mortgage lender didn't even care and only asked to see one of my 5 accounts. 

welly_59

I came across this with monzo. I had pots for bills, pots for saving, and my normal balance . 
On statements it looked like I had no money as my normal account was always emptied upon payday, and even went negative at points, but didn't matter as the money as there just in a pot.

I stopped and withdrew all my money I to main account a few months before applying for mortgage 

gettingthehangofthis

Thank you – so it doesn't really matter?

onemouseplace

I do a similar thing - keep very little money in my current account and transfer to separate pot as and when to cover credit card spending which I then transfer back once a month to pay off the balance in full.

No issues getting a mortgage whatsoever.  I still think it's slightly odd that they never asked to see our credit card statements as we do the vast majority of our spending on them (for rewards and protection) and very little day to day spending comes out of our current accounts.

ACG

I am going to be really honest...
You would be in my Pain in the backside list of customers. 

There are times I feel like a forensic accountant because what makes sense to you does not make sense to anyone else. It can be very time consuming. Monzo is the biggest culprit of this. 

ElwoodBlues

Just check out your credit file and get familiar with what it looks like and what's on there. That's what lenders will be most interested in. As long as your credit card balance is low and paid in full each month they won't be bothered about your pots or transferring money to savings accounts.

I could practically hear my broker's face screwing up over the phone when I was explaining to him that I use credit card B to pay off credit card A each month, purely to make use of the extra interest free period. The downside is that it leaves twice as much debt showing on my credit file, even though I settle card B in full every month.

housebuyer143

ElwoodBlues said:

Just check out your credit file and get familiar with what it looks like and what's on there. That's what lenders will be most interested in. As long as your credit card balance is low and paid in full each month they won't be bothered about your pots or transferring money to savings accounts.

I could practically hear my broker's face screwing up over the phone when I was explaining to him that I use credit card B to pay off credit card A each month, purely to make use of the extra interest free period. The downside is that it leaves twice as much debt showing on my credit file, even though I settle card B in full every month.

Suppose it depends how much you are borrowing. My partner and I are sitting on £20k credit card debt, all cards maxed out because it's 0%. Bank didn't bat an eyelid. 

gettingthehangofthis

ACG said:

I am going to be really honest...
You would be in my Pain in the backside list of customers. 

There are times I feel like a forensic accountant because what makes sense to you does not make sense to anyone else. It can be very time consuming. Monzo is the biggest culprit of this. 

Thank you, what would you suggest doing instead? Keep one big pot for everything in my salary account so there's less money moving around?

gettingthehangofthis

ElwoodBlues said:

Just check out your credit file and get familiar with what it looks like and what's on there. That's what lenders will be most interested in. As long as your credit card balance is low and paid in full each month they won't be bothered about your pots or transferring money to savings accounts.

I could practically hear my broker's face screwing up over the phone when I was explaining to him that I use credit card B to pay off credit card A each month, purely to make use of the extra interest free period. The downside is that it leaves twice as much debt showing on my credit file, even though I settle card B in full every month.

It's normally well under £100 (out of 3k limit) and my score is good.