Beware of the red flags that mortgage lenders look out for when considering your mortgage application.
When applying for a mortgage, it’s well-known that income and credit history are important, but many people don’t realise that what their bank statements record can also have an impact and even create red flags on an application.
A recent survey by Boon Brokers revealed that 83% of people are unaware of the bank activity that raises unexpected “red flags” during a mortgage application. We’ve spoken to some mortgage experts about what these are so you can improve your chances of getting the mortgage you want.
Gerard Boon, partner at Boon Brokers, said: “Not all lenders will scrutinise your bank statements, but if you’re seen as a higher risk, perhaps with a smaller deposit or self-employed, lenders are more likely to take a closer look. Anything which shows that the account holder may struggle with debt or to control their spending is likely to create questions.”
Working for family members might seem like the perfect scenario but it isn’t when it comes to getting a mortgage. Lenders get nervous because it might be that family has only employed their relative so they can get a mortgage.
“We have seen a rise in staged income, especially since COVID. People go from salaries of £10,000 ($13,503) a year to £50,000 a year and when we dig a little deeper we find out it’s a family business and that their income is essentially inflated to improve their likelihood of getting a mortgage,” says Sarah Tucker, founder of The Mortgage Mum.
Read the full article here.
Photo via Yahoo Finance UK