What do Lenders Look for When Assessing my Bank Statements?

Why does a lender need my bank statements, and how do I obtain them? 

A lender will need to see your bank statements to learn more about your spending habits. They will analyse your bank statements to determine whether or not you are the sort of person who can manage your money responsibly and can afford to keep up regular mortgage payments.   

After all, a mortgage is likely the most significant financial commitment you will ever make in your life and is not something to be taken lightly. 

You have several ways to obtain your bank statements either by post, over the counter at your local bank or print from your online banking platform. 

What will lenders be looking for on my bank statement? 

As stated above, they need to know you’re responsible with your money. One of the things they’ll be looking at is if there are any overdrafts. Using this often is not necessarily a bad thing; regularly exceeding the overdraft limit is not ideal. 

More factors to be careful with are potential returned direct debits, showing a lender you are not consistently reliable, and not disclosing loans at the application stage won’t look good if the lender finds any outgoings on your bank statements that you failed to mention.  

Another awareness is if you have missed payments for personal loans and things such as credit cards. What will impress the lender is demonstrating that you handle your money well and meet payment deadlines. 

Will gambling affect my chances of getting a mortgage? 

If you have a history of gambling, the occasional bit of fun is harmless, but if you are frequently wagering significant amounts of money, whether you’re making it back or not, the lender will consider whether or not these transactions are reasonable and responsible.   

For more information, check out our article “Do Gambling Transactions Look Bad on My Bank Statements?”  

What can I do to show the lender I am reliable?  

The answer is simple – be sensible. Typically, a bank would ask for up to three months of your most recent bank statements. These will show your salary credits and all your regular bill payments.  

Ensure that your bank account is conducted in a manner that shows you are reliable and manage your finances well.   
 

The first thing we’d suggest is that if you are a frequent big spender, you take a break for some time. During this break, you will find yourself in a better financial state and could improve your mental health. 

If you need to save some extra money, some choose to cook at home instead of takeaways, stop treating yourself to unnecessary large purchases, and limit your subscriptions; this will help free up additional cash to ensure you can pay bills on time. 

This boils down to simply being sensible and planning with plenty of time ahead of what you’re looking to do. The further away you find yourself from bouts of debt and financial uncertainty, the better your chances will be with a lender.  

Speak to a Dedicated Mortgage Advisor in Manchester 

Whether you’re a first time buyer, moving home, or self-employed in Manchester, it’s always essential to keep on top of your finances.  

If you have a history of bad credit history and are unsure of what to do next, you can always enquire about specialist mortgage advice in Manchester by getting in touch with us today. We’ll advise as best as we can to help you through your mortgage journey.