When applying for a mortgage the lender will assess all aspects of your credit report to help them decide if you are able to meet the monthly repayments for the deal for which you are applying.
They will also consider if you would be able to afford higher repayments should the interest rates increase.
Whilst many people are aware of the obvious factors that might prevent them from getting a mortgage, like not being on the electoral register or having a poor credit score, there are a number of other more surprising ‘misdemeanours’ which could make it more difficult to get accepted that you might not have heard of.
Borrowing money from your friends
Your entire credit history will be looked at in detail when applying for a mortgage, including your bank statements.
As we use cash more infrequently, our bank statements have now become a clear indicator of where, when, and how frequently we spend.
Transferring funds to friends and family is also a clear indicator of how often we rely on friends to lend us money.
Lenders and brokers must be extremely responsible when assessing suitability for a mortgage, therefore if you are a frequent borrower, this will send alarm bells ringing.
Comical bank references
It is entirely dependent on the lender as to how they may react to humorous bank references. Whilst jokey references when paying friends may be funny at the time, if you are applying for a mortgage with a strict lender this may hinder your chances.
It is important to note that it is often the frequency of these transactions that can be a cause for concern as it can suggest a financial reliance on others.
Gambling
A person who frequently gambles large portions of their income and has a bank statement with a pattern of high-risk spending could find it difficult to get a mortgage.
Frequent payments to gambling companies could make you a less appealing prospect than an applicant who makes regular deposits into savings instead. Lenders might consider how much you are gambling in relation to how much you are earning, therefore small weekly payments towards the national lottery for example could be totally acceptable.
Getting divorced
If you apply for a mortgage whilst you are going through major lifestyle changes that has the potential to impact your finances, this could negatively affect your chances of being successful. If you are getting divorced whilst applying for a mortgage and your household income is likely to drastically change, lenders may be less likely to offer you a mortgage.
Getting a mortgage after divorce isn’t impossible, you may just have to provide additional information to prove that you are able to afford the repayments as a single person.
Always consult an expert before making any big financial decisions, like taking out a mortgage, to ensure you are fully prepared. Be ready for additional costs post approval.
When planning on buying a home many only think of the monthly mortgage payments and the deposit, however there are a number of additional costs that you need to consider.
Whilst some of these are one off costs, others are a long-term commitment. Make sure you are aware of all the costs before you even consider taking out a mortgage to avoid any nasty surprises.
For more information, head to the Norton website.
