What are lenders looking for when checking bank statements?

C.w_Wilson · 29 January 2020 at 9:21AM

Hi all,

Stressing out a bit right now so looking for a bit of advise.

So me and my partner are applying for a joint mortgage (she is self employed). We have 10k deposit right now and we were planning on saving another 5k before applying. The other day we found a house we love, and booked a viewing. Loved it even more. So we went ahead and applied for a mortgage in principle with rbs and it was approved for around £160k max.

So far so good, but the thing is, as I wasn’t expecting to apply for a mortgage so soon - my finances perhaps look less than desirable.

Only just this month cleared my overdraft of £400 that I was using every month for a while. And my bank statements are gonna show roughly £40 -£50 a week gambling, takeaways, random spending etc. I have a car loan that I have never missed a payment on, and have cleared debt before for tools etc for work.

Should I be worried? I don’t want to get turned away at the last hurdle and let my partner down

ACG · 29 January 2020 at 9:29AM

Generally speaking they are looking for salary credits, they are looking to see if there are any undeclared commitments that may not get picked up on the credit report, account conduct in general (ie bouncing direct debits).

The only potential issue is the gambling, but that might not be an issue. If you are on £12k a year and you are spending £5-10 a day, that would probably be looked on less favourably then you putting it all on, on a saturday/sunday for the football for example.

Difficult to say but I think at that sort of level you are probably going to be fine.

NewShadow · 29 January 2020 at 9:30AM

They're checking affordability.

You are required to declare any contractual commitments and your income when applying for a mortgage.

Bank statements are an easy way to see if you've underestimated/falsely declared any expenditure/income.

Plus bank statements for a three month period give an indication of how you manage your money - which helps them establish if you're 'financially prudent' and therefore a safe bet.

Don't worry - I had this conversation with my broker last week... they make allowances for Christmas

C.w_Wilson · 29 January 2020 at 10:08AM

I don’t have any bouncing direct debits or anything, maybe a historical late payment on a phone bill or something I’m not sure.

With the gambling thing it’s usually £20 here and there, but looking back it’s been pretty constant for me to do that twice a week (I.e one evening during the week and on a Saturday for football or whatever). At the time I didn’t really think about it but looking at it now I suppose it looks pretty bad - I never go beyond my means or anything but to my shame it looks like I’m consistently gambling.

Thanks for the reply’s, hopefully I’m just stressing out over nothing :rotfl:

ACG · 29 January 2020 at 10:12AM

I think you will be fine.

They would probably be more concerned if it was a fiver a day than twice a week.

DCFC79 · 29 January 2020 at 10:49AM

A broker may have been able to get you more for a mortgage but that ship has now possibly sailed now you have a mortgage approved for around £160k max.

C.w_Wilson · 29 January 2020 at 11:21AM

We actually have a mortgage broker as a family friend who advised us that it wouldn’t make too much of a difference if we got a agreement in principle from rbs, we didn’t have to use it if we found a better deal through him anyway. We just kinda wanted an idea of what we could expect to borrow.

[Deleted User] · 29 January 2020 at 12:10PM

When I applied for a further advance this year my bank statements were crap ! Mostly in overdraft ( but not exceeding ) clearly frittering money away on rubbish etc. No gambling and ive only my mortgage and car loan. No gambling but lots of meals, Tesco, clothes and general rubbish
I got the formal mortgage offers within a day of sending bank statements in - and mine were about 9 pages each- so 27 pages of diatribe . I never got the impression they ( Nationwide or Santander ) really poured over them with any great detail

C.w_Wilson · 18 March 2020 at 1:01PM

ACG said:

I think you will be fine.

They would probably be more concerned if it was a fiver a day than twice a week.

UPDATE for anyone who is interested

didnt get the first house we offered on as someone went higher, we did however offer on a different one and it was accepted.

few weeks down the line and we have just today had our offer issued to us through nationwide, not even a question asked about bank statements, sails through very smoothly.

Thank you everyone for your replies, hope this puts someone else’s mind at ease when applying for a mortgage!

What are lenders looking for when checking bank statements?

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