Managing your bank account in the run up to your mortgage application just makes sense. You need to be confident that your bank account is going to withstand the scrutiny of the lender. So here are some tips to follow to ensure you don’t trip yourself up with some of the basics.
- Maintain a credit / positive balance where possible
- Avoid unpaid direct debits and standing orders
- If you need to venture into a minus balance / overdraft, make sure it’s an approved overdraft facility
- Avoid gambling in your accounts
- Ensure that your monthly savings is clearly demonstrated
- Make sure to pay your rent by bank transfer, not cash
- Avoid having too many accounts, as this can get messy
In the 6 months leading up to your application, be sure to keep a record of any large transactions in your bank accounts outside of your standard monthly spend. These are likely to be queried by the lender.
It is preferable that you save a set amount each month into a savings account to demonstrate your affordability for the mortgage. If you only operate a current account and nothing else, this can be fine once the monthly build up of funds is clear to see.
Gambling should not be a regular feature on your bank statements. If you show excessive gambling on your bank statements this can be a red flag for most lenders. Prioritise the things that are going to strengthen your application, and park anything that’s going to be seen as an issue. Gambling is one of those things that you are better off keeping off your bank statements.
Finally, remember that online banks, Revolut and N26, are very much banks and you will be expected to provide up to 6 months statements for those accounts too.
Managing your bank account is an important part of the process of getting mortgage ready. But when you follow the above guidance, it needn’t be a big production.
For the full set of tips on making yourself mortgage ready, download our Top Tips for First Time Buyers guide – 17 pages of knowledge from years of helping people get the mortgage they want.