Mortgage expert says there are 4 things that look worrying on bank statements
If you are looking at getting on the property ladder, understanding what lenders are looking for when applying for a mortgage could be essential to your success.
The year began with the "mortgage price war"; lenders across the board cut their rates with anticipation that the Bank of England was to cut its base interest rate - however this came to a crashing halt with lenders, including Santander, TSB and RBS, now upping deals. In the UK there is a whole range of mortgages to choose from but firstly you need to think about all the factors that could affect your eligibility and getting accepted or not.
Elements including your credit score, ongoing debts, length of time at your job, and size of your deposit could affect your chances. A money expert has shared four key things that lenders will turn their nose up if they see them on your bank statements.
Aidan O'Brien, who works as a mortgage and protection adviser, shares his advice on financial decisions via his TikTok page @aidan_mortgageadviceesn. In a recent clip, he explained: "Lenders don't want to see these on your bank statements when applying for a mortgage."
The first red flag on a bank statement which could lead to rejection is numerous gambling transactions, Aidan says. He explained: "There's absolutely nothing wrong with having a bet here and there, however, if we're seeing daily, excessive use of gambling transactions, lenders aren't going to want to see this on your bank statements and ultimately they're not going to want to approve you."
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TikTok users were shocked when Aidan said that banks do not like to see "silly transaction names" on statements. So, when you are sending money to friends or family and type in the description box what the transaction is for, Aidan advises writing something sensible. One individual commented: "Never getting a mortgage because I pay my friends for an expensive sushi lunch with the payment reference 'treat yo self pookie wookie bear x' is wild."
Another wrote: "As a mortgage underwriter, silly transaction descriptions are the only bit of joy I get in the day." Aidan said: "I have seen applications decline for this reason. For money laundering purposes having an illegal name description that may seem a joke would be flagged."
The third reason you may be declined, according to the mortgage expert, is sending large transactions to friends and family. "If there's a good reason for that, then all you need to do is explain that."
And finally, Aidan said: "Lenders do not want to see you going into your overdraft. So, if you have a habit of going into your overdraft every single month and this is on your bank statements, lenders are going to see this and they are going to decline you."
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