What Do Lenders Look for When Assessing My Bank Statements?

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

Lenders have a very important reason for requesting access to your bank statements: they aim to gain a deep understanding of your financial habits and recent financial conduct.

Your financial management, as revealed by your bank statements, plays a central role in determining the amount a lender is willing to lend you, if they are willing to lend at all. This assessment primarily revolves around managing risk.

Lenders need to be confident that you exhibit financial responsibility and can manage your financial commitments reliably. This becomes especially significant because a mortgage represents one of the most significant financial commitments you will make in your lifetime, and it requires thoughtful consideration.

Acquiring your bank statements is a straightforward process, and there are various methods to obtain them. These include receiving physical copies by post from your bank, visiting your local bank branch to collect them, or accessing printable versions through your bank’s online platform, a convenience widely available in today’s digital banking landscape.

What will lenders be looking for on my bank statement? 

Now, let’s dive into the central question: What specific elements will lenders closely examine on your bank statements, and what might raise concerns from their perspective?

As previously mentioned, the primary goal is to assess your financial responsibility. One critical aspect under scrutiny is the presence of overdrafts. Occasional use of your overdraft facility isn’t necessarily a cause for concern. However, if you consistently exceed your overdraft limit, this could raise doubts about your financial prudence and reliability.

Lenders also pay attention to returned direct debits, which might suggest inconsistent reliability in meeting financial commitments. Additionally, it’s important to be transparent about any existing loans during the application process.

Failing to disclose them could erode trust with the lender, especially if they uncover undisclosed financial obligations on your bank statements. Trust plays a pivotal role throughout this evaluation.

Furthermore, it’s essential to maintain a track record of timely payments for personal loans and credit cards. Demonstrating your ability to manage your finances responsibly and meet monthly payment deadlines is likely to make lenders more inclined to approve a loan amount closer to your desired borrowing amount.

Will gambling affect my chances of getting a mortgage? 

This is a frequent question that we encounter quite often. Many customers face challenges when they have a history of gambling activities.

While the occasional bit of entertainment through betting is harmless, engaging in frequent high-stakes gambling, whether it results in profits or not, can have a notable impact on how a lender perceives your financial situation. In such situations, lenders are unlikely to view your circumstances in a positive light.

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

Leveraging our extensive experience in helping first time buyers in Leicester and home movers in Leicester, it’s worth noting that most mortgage lenders typically request a minimum of three months’ worth of bank statements from applicants.

Given this requirement, it presents an ideal opportunity to shift your focus from the past to the future. You now have a dedicated period of at least three months to enhance your financial situation. One prudent step to consider is taking a hiatus from frequent visits to local bookmakers or online gambling platforms.

This break can have a positive impact not only on your financial health but also on your overall well-being. Additionally, we recommend exploring strategies to save money during this timeframe.

Simple adjustments, such as choosing to cook at home instead of dining out, trimming unnecessary expenses, and discontinuing redundant subscriptions, can free up extra funds to ensure that your bills are promptly settled.

In essence, the key here is to exercise sound financial judgment and engage in proactive planning well in advance of your intended financial endeavours. The farther you distance yourself from periods of financial instability and debt, the greater your prospects will be when engaging with a lender.

Speak to a Dedicated Mortgage Advisor in Leicester

No matter if you’re a first time buyer in Leicester, currently in the midst of moving home in Leicester, or are self employed in Leicester, maintaining a strong handle on your financial situation is consistently important.

If you happen to be facing challenges related to a less-than-ideal credit history and are uncertain about the way forward, we strongly recommend seeking specialised mortgage guidance in Leicester by reaching out to us today.

Our dedicated team is fully committed to offering the most comprehensive advice to help you throughout your mortgage journey. Please don’t hesitate to get in touch; we are here to help you in effectively navigating your financial path.

Date Last Edited: December 6, 2023