Mistakes to avoid on your bank statements...
Posted on 6th September 2022 at 10:24
Mistakes to avoid on your bank statements...
In some cases when you submit an application to a lender, they will request copies of your bank
statements to support your application. In most cases this will be straightforward but there are times we
have seen things showing on bank statements to cause delays on applications and even cases to be
declined so here we have our top mistakes to avoid if you are applying for a mortgage!
Bounced payments
In this case direct debits and standing orders that have attempted to be taken but have bounced as there
was enough money in your account is a potential red flag to lenders as a sign of money mis
management or spending beyond your means. Our advice is to try to always keep enough money in your
account or adjust your direct debits to come out just after payday to ensure your money is there in time
for it to be taken.
Excessive Overdraft usage
A little bit of overdraft usage is OK, as this shows you can use credit little and often and pay it back
quickly. But excessive overdraft usage or exceeding your overdraft limit is another sign of money
mismanagement which can cause a lender to decline an application. At the end of the day, they are
lending you a large sum of money so they want to see you can manage smaller amounts of money
before they give you a large sum of money.
Extending your overdraft facility
This again shows you require extra credit to help handle your finances. Increasing your facility once is
ok, but multiple requests to extend your overdraft and remaining in your overdraft for long periods shows
money mismanagement.
Excessive gambling transactions
The spending on gambling is relative, if you earn £2,000 a month and only spend £20 per month on
gambling this would be OK. But if you are spending a few £100s per month on gambling or there are
multiple transactions in a month to gambling sites, this is a sign of potential addiction or lack of control
over gambling.
Unexplained transactions
Unexplained transactions are a red flag for money laundering. If you have multiple transactions of sums
of money entering your account and quickly leaving your account again with no explanation or plausible
reason, this is a red flag for money laundering will likely result in a declined application. If you do have
multiple transactions of money coming in and out of an account which you can explain e.g., transferring
money into your own savings account for your depsoit, this is OK if you can explain it.
Transactions with stupid names
We’ve all been there when you transferred your mate some money for last nights take away or drinks the
weekend before but sending or receiving money with transactions under stupid names can also lead to a
declined application. At the time when you send your mate £20 for your beers on Saturday night and
name it ‘Drugs’ or ‘Jihad training’ it may seem hilarious. But it isn't so hilarious when that’s the reason
your mortgage application gets declined.
If you have any questions about what we have covered or want to ask any questions about your own
position before applying for a mortgage please call us on 01482 205084 Or email us
info@greenandgreen.net
Tagged as: decline, declined, home, homeowner, mistakes, mortgage, mortgage mistakes, mortgagebroker, no
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