Lenders warn buyers are being refused mortgages due to bank statement banter
One customer was rejected for a loan after 'inappropriate language' was spotted on their bank statement
BUYERS are having mortgage applications rejected due to banter on their bank statements.
In one case seen by a digital mortgage broker a customer was deemed unsuitable for a home loan due to “inappropriate language”.
A mortgage expert for a major lender also confirmed to The Sun that applicants had been refused because these jokes may make them seem irresponsible.
The source said: “I’ve seen buyers who’ve had mortgages refused because a payment reference might say ‘drugs’ or have swear words.
“It’s a joke between friends but when an underwriter sees it they may think that the applicant isn’t very responsible.”
Borrowers are usually expected to supply between three and six months worth of bank statements when applying for a mortgage.
What do lenders look for when applying for a mortgage?
WHEN you apply for a mortgage a lender may ask to see three to six months of bank statements. Here's what they are looking for:
- Affordability- Bank statements normally display your monthly income and outgoings, this helps them work out if you can afford the loan
- Income - They need to see proof of your salary with the employer's name stated
- Conduct - They will look through your transactions to see if there are any bounced direct debits or standing orders
- Lifestyle - They will also evaluate your spending, including social life and holidays or to see if you have an excessive gambling habit
- Credit commitments - They will use your bank statements to see how big your debt is, for example loans, car finance deals or credit cards
Lenders look at them to check your income as well as affordability, including your outgoings.
Under stricter rules, which were introduced in 2014, they also check to see how you behave, for example, if you’ve got any direct debits or standing orders that have bounced and to check that you are living within your means.
Jonathan Harris, frombroker Anderson Harris, said: “Underwriters are not renowned for their sense of humour so it pays to be cautious.
“They will go through your bank statements with a fine tooth comb to make sure you can afford your mortgage and are likely to make your payments on time each month.
“Borrowers should therefore be wary of giving them any reason to turn down a mortgage application and jokes between friends could be easily misconstrued. Keep humour for the comedy club.”
Andrew Montlake, director at Coreco Mortgage brokers said: “Making a mistake such as this could well be the difference between getting a loan and not."
From improving your credit score to getting a mortgage in principle, yesterday we rounded up nine tips to help first-time buyers get on the ladder.
Plus, in this weeks' Money Saviour column we investigate whether it's worth getting a 5 per cent mortgage or saving more to secure a cheaper home loan.
What happens if you're turned down for a mortgage?
IF your mortgage gets declined, three are a number of things you can do to improve your chances of getting approved next time. Here are the common reasons why you may have been turned down and we explain what to do next.
- Poor credit history
- Not registered to vote
- Too many credit applications
- Too much debt
- Payday loans
- Mistakes
- Not earning enough
- Too small a deposit
- Self-employed
- Lived in the UK for less than three years
A professional mortgage broker or independent financial adviser who specialises in mortgages will have regular dealings with a wide selection of lenders.
They will be aware of what different lenders require before offering a mortgage, and will speak to the lender on your behalf.
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