Person making a transaction using a card which will show up on their bank statement

What Lenders Look For On Bank Statements

During the mortgage application process, you might need to provide your bank statements to the lender. This can make many customers nervous. However, it is worth noting that not all lenders request to see this information. But they do all reserve the right to do so. Therefore, if you are planning to apply for a mortgage, it’s worth tidying up your account activity to improve the chance of being accepted.

Off the back of the Mortgage Market Review 2014, lenders started paying much more attention to customer’s outgoings. It’s probably fair to say that, at the time, lenders went a bit overboard in their analysis of outgoings. You may remember hearing stories about lenders wanting to know how much people paid for haircuts and eating out! Nowadays, there are more data sources available to lenders. Therefore, they place more reliance on the Office of National Statistics and other sources to estimate some of these outgoings.

Things To Look Out For

There are certain things you can do to enhance your chances of having your application accepted though. Clearly, if you are asking for a mortgage and you are bouncing direct debits and racking up bank charges then any lender will frown upon that. If this sounds like you, then you’ll need to work on getting things in order. Using an overdraft facility is usually ok if you do not exceed the agreed limit. Even then, if it’s a one-off with a good explanation, it’s still possible that you will be accepted.

Gambling is something that many lenders have an issue with. If it is very small amounts then they don’t tend to be concerned about this, but if you gamble more regularly than that, it would be wise to address this prior to applying.

I think it’s a good idea to get “mortgage-ready” before you find a property you want to offer on. Therefore, if you have any concerns about anything on your bank statements, I’d recommend you contact us sooner rather than later to avoid the disappointment of having an application declined.

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