Red flags for finance/mortgage

[Kiwi79]

Hi, recently I was a first time buyer and the process struck me as fairly intense. Filled in loads of forms detailing all my outgoings and provided bank statements to determine "affordability". I am now considering going for a monthly car lease (yeah I know, I know PH disapproval)

My question is what are they and to a certain extend what were the mortgage folks looking for -

- Do they base it upon typical outgoings anyway regardless of how frugal your are e.g.) assumption £30 a month for mobile
- Would a one off payment for say £500 a year for the gym be viewed more favourably than a £40 regular direct debit as that looks like a commitment
- If my commute is only 15 minutes by car generating a petrol bill of say £100 a month but I spent £220 because I drive for enjoyment would they view this all as "committed commuting costs"as opposed to discretionary spend
- Would £50 spend at Ladbrokes be red flag
- What about £100+ cash withdrawals where they have no idea what you spent it on

Curious if anyone has any insight on what happens behind the scenes

[Mortgage_tom]

Different lenders look at your out goings differently.

There are 3 main categories of expenditure:

Committed expenditure, things like: Loan payments; credit card bills; child maintenance and school fees.
Basic living costs: includes: Council tax; utilities (gas, electricity & water bills) ; phone bills; cost of travel to work; insurance premiums and food.
Quality of living costs, This category will be quite wide but could cover: Spending on clothes; entertainment and household goods amongst other things

All lenders will consider your committed expenditure, some will consider your personal basic living costs & quality of living costs. Whilst others will use office of national statistics ONS figures for your basic living costs & quality of life costs.

To get an idea of how you car lease will effect how much you can borrow try putting your income and lease cost in to these two lender calculators:

https://rbsintermediaries.hdddirectsolutions.co.uk...

https://www.halifax-intermediaries.co.uk/tools_and...

Both of the above use ONS data for your basic livings costs & quality of living costs, but will asses your committed expenditure. I would think you will see quite an impact due to the monthly cost of the lease and that the impact will be different with each lender. But this will depend on your LTV, income level and how much the lease is compared to your income. Both will be similar until you put your proposed lease in and any other debts (commitments), then I would guess Halifax will be quite a bit lower then Natwest...hard to say without knowing your income and LTV.

But you should note that the mortgage advise process should take all 3 types of your expenditures in to consideration before making any recommendation to you about your mortgage.

Hope that helps.

[SlidingSideways]

When we re-mortgaged a couple of years ago, the lady at Nationwide mentioned that any payment to a payday loan company found in our statements would signal the end of the process there and then.

[Sarnie]

SlidingSideways said:

When we re-mortgaged a couple of years ago, the lady at Nationwide mentioned that any payment to a payday loan company found in our statements would signal the end of the process there and then.

Yep........especially if it's recent....