The Importance of Bank Statements to a lender

Why do lenders want to see your Bank Statements?

Most lenders will initially ask for 3 months of your latest full bank statements and sometimes they will ask for more, but why?

Lenders will want to see how you manage your money each month and if you are able to take on a mortgage. Before applying for a mortgage we will advise you to ensure you are following good banking conduct.

What will they see as a positive?

- No strange transaction references - It may be a funny idea to send money to friends/family with silly referances on but don't forget your lender and broker will see this as well and may question this with you.

- No missing direct debit payments - Missing payments is a big red flag as it shows you cannot manage your money.

- Bank statements clearly showing your salary credits (Pay going in) and this figure matching your payslips

- Ending the month with a good balance - If you are ending the month in your overdraft, this shows the lender that you are struggling to live comfortably with your current income and adding a mortgage into this mix may impact you negatively.

What will they see as a negative?

- Unexplained large sums of money being transferred especially if these are frequent

- Frequent gambling transactions

- Overusing your overdraft or misuse of this

All lenders follow different criteria so what may be a big red flag to one lender, may be considered by another. We are a whole of market broker so we have lenders who we can approach, even if some of the above are showing on your bank statements.