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What do Lenders Look for When Assessing my Bank Statements?

How a mortgage lenders in Essex may assess bank statements

Whether you are a First-Time Buyer in Essex, Home Mover in Essex or someone looking to Remortgage in Essex, the lender is going to want to see your bank statements. The lender will analyse them, looking at all aspects of this, though at the end of the day, their aim is to determine whether you can manage your money responsibly and maintain regular monthly mortgage payments.

You need to be aware that your bank statements will say a lot about you. Something that often crops up and causes a fair amount of trouble, is gambling.

Why does the lender care if I gamble?

Whether you’re a regular user of gambling sites or spend money on the Grand National once a year, there is nothing illegal about gambling. With many bookmakers advertising on the mainstream media, to many people gambling is simply a fun hobby.

However, even the bookmakers and gambling advertisers themselves urge customers to ‘please gamble responsibly’, a message that also applies when it comes to the world of mortgages. Whilst the lender can’t tell you how to live your life, how you spend your money or indeed to moralise on ethical rights and wrongs of gambling, it is their job (underscored by mortgage regulation) to lend responsibly to their customers.

Lenders need to prove to their regulators that they are in-fact lending responsibly and being careful. As such, it isn’t entirely unreasonable of them to expect the people to whom they lend to adopt a similar approach when it comes to their own finances. If you think about it; Would you really lend your own money to someone who you know gambles?

Can I still obtain a mortgage in Essex if I’ve been gambling?

As previously touched on, gambling is not an illegal form of entertainment. With that in mind, just because you have a few gambling transactions on your bank statements doesn’t mean you will be automatically declined for a mortgage. That being said, it is up to the lender whether or not some of these are deemed reasonable or responsible, checking how frequent they occur and the impact they have on your income.

If the transactions are small and infrequent, with no major impact to your overall regular credit bank balance, then the lender is likely to ignore these and proceed as normal. On the flip side, if you gamble frequently and are always overdrawn, the lender will likely see you as irresponsible and decline your application.

What else would lenders rather not see when applying for a mortgage in Essex?

As you’ve read, lenders are basically looking at your bank statements to give themselves confidence in whether or not you are smart with your money.

Remember that these mortgage lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans. As such, they are well aware that these things can also be an issue.

When applying for a mortgage, the key is how the things are managed. For example, having an overdraft facility and occasionally using it isn’t necessarily a bad thing. If you regularly go over your overdraft limit, this will be a problem. Lenders keep their eye out for excess overdraft fees or returned direct debits because these would normally show that whoever owns the account is not great at managing their money.

Other things to bear in mind include;

  • Credit transactions from payday loan companies.
  • Undisclosed loan repayments (If you lied about not having any loan repayments going out).
  • They would look out for any obvious missed payments.
  • Analysing how often you’re overdrawn (if you are overdrawn soon after payday and spend the month with no income, this could be a problem).

How can I improve my bank statements ahead of the mortgage process?

Be smart and plan ahead. Generally speaking, a bank would ask for up to three months of your most recent bank statements, which will show your salary credits and all your regular bill payments. If you know you would like to apply for a mortgage in the future, try to make sure that you avoid any of the aforementioned issues.

Take a break from gambling for a short while and work on making sure your account is in the best shape for a future mortgage transaction. Your Mortgage Broker in Essex may be able to help, as there are some lenders who may ask for fewer bank statements than other lenders might want.

It is worth remembering that even these lenders would reserve the right to request bank statements in certain circumstances, so your best bet is to be careful and always gamble responsibly.

Essexmoneyman.com & Essexemoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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