to be pissed off that mortgage lender wants me to explain my transactions?

[TiaMariaandSpringCleaning]

Im about to move mortgage providers. Have a very good credit history, no bad debts, good equity etc - ie not a high risk borrower or anything. The new lender has written to ask me and DH to provide bank statements with written explanations for any transaction over £250 (in or out).

I cant fathom what possible reason they have to require this information, does anyone know? WIBU to explain my transactions as "buying jelly beans" (£320), "putting tenners down a drain for the hell of it" (£400), giant sex toys (£260) and so on? Can they refuse to lend to be because of an excessive jelly bean addiction? Or is there a good reason for this that I dont appreciate?

Oh, and if I can tell them anything I want, does anyone have more creative ideas for the other transactions? This could turn out to be rather fun....

Depends on if you want a mortgage from them or not really...

Agree with chipped, why waste your time? If you are not happy to provide that information to a company in return for them lending you thousands of pounds then find a provider who doesn't require that information.

I wouldn't take the piss if you want a mortgage offer from them.

They want to know so they can be sure you can manage your money and won't default on mortgage payments. That is fairly obvious.

Wouldn't be particularly thrilled about doing it either though to be fair op, do you have to use these providers? I've recently had two mortgage offers (purchase and remortgage to buy to let) and neither asked for that kind of information.

Have you ever had a payday loan? That could be why they're asking.

But does it Chipped? (Serious question!) Would they lend if I tell then that a £250 withdrawal was for a months groceries for example, but not if I bought pretty, pretty shoes with it?

*they did obviously ask for bank statements, just not written explanations.

I think £250 is a bit ridiculous - over how long a time period? Such a low amount in the grand scheme of things too!

Sit back and rationally think to yourself - don't cut off your nose to spite your face, if you need the mortgage and this is the best deal, just do what they ask and get the mortgage then move forward.

I'd likely feel the same as you but they're offering something you need, just humour them

They want to know so they can be sure you can manage your money and won't default on mortgage payments. That is fairly obvious

Hmm that's what a credit check is for

What if you're a gambling addict?
Or in trouble with a loan shark?
Or your only just making ends meet and have no disposable income?

If you can't prove you can pay it back, they quite rightly won't lend it to you.

And a credit check is nothing more than a tool to calculate the risk of you defaulting on your loan based on previous behaviors.
It doesn't explain your day to day spending.

But if she's never defaulted on a loan and has a good credit history then what does it matter what she spends her disposable income on. Who decides whether that's right or wrong? So what if she goes to the track every Friday and places £250 on a three-legged donkey with narcolepsy if it's extra money?

It's so that they can guage what your spending habits are, what's fixed and what's not.

Reasonable to me.

Look what happened when they chucked money out the door - we had the credit crunch.

They want to understand what your spending pattern is and whether your spending is committed or not. They are essentially credit assessing you so that they can decide whether or not they want to lend to you. There is a clear reason why they want to know this - if interest rates go up, you may need to pay more at some point in the future and they need to assess your ability to do this. So your stability of employment along with your spending are key

No, don't have to use them, but they had a great rate.

Have never had a pay day loan or anything, my bank statement is actually very boring, it's really just the principle; it seems pointless and very intrusive. Ive never been asked before, theres nothing unusual in my finances... id understand them asking if I sent a statement in that had loads of strange transactions or something, but they're asking in advance of seeing anything. I don't know if its a new requirement or if its just them.

So I shouldn't have some fun with it then, awww! [Sad]

But then surely ask for a breakdown of fixed payments then? Or a list of direct debits? What if she had a zillion direct debits for £249 (which in direct debit terms is a fairly hefty amount).

Why would you need to demonstrate your day to day spending

It makes no sense though. As long as the account isn't overdrawn at the end of the month, what does it matter what goes in and out? You could withdraw £200 in cash every day and not have to explain or £250 once a month and have to write it down.

Don't get it.

Of course lenders are entitled to ask for any information they feel fit to assess your application as they are lending you a substantial sum of money. (On their terms - not yours)

That said, I work for a notoriously strict lender and I've not had to ask my customers for that much detail.

However, there are some FCA driven regulatory changes coming into play in April which are going to change the way the industry assesses lending and a much more rigorous process will need to be adhered to. Don't know the details yet as I haven't been on the training course but maybe the lender you are using has already started to implement changes which they are aware of? Not saying this is necessarily the case but it is a possibility.

I do not to think it's reasonable and I would not borrow from them under these circumstances. Seriously.
I would tell them that I do not wish to share this information with them. I appreciate that you might not want to do that so you have to decide if it's acceptable to you or not.

Of course lenders are entitled to ask for any information they feel fit to assess your application as they are lending you a substantial sum of money. (On their terms - not yours)

That said, I work for a notoriously strict lender and I've not had to ask my customers for that much detail.

However, there are some FCA driven regulatory changes coming into play in April which are going to change the way the industry assesses lending and a much more rigorous process will need to be adhered to. Don't know the details yet as I haven't been on the training course but maybe the lender you are using has already started to implement changes which they are aware of? Not saying this is necessarily the case but it is a possibility.

I wouldn't do it either - the 'regular' checks should be sufficient, there are still plenty of banks out there lending to people who don't have a bad credit history.

Having said that, I suppose it's how they keep their rates low.

Not low enough to make me do that - unless it's 0% - then maybe

Of course lenders are entitled to ask for any information they feel fit to assess your application as they are lending you a substantial sum of money. (On their terms - not yours)

That said, I work for a notoriously strict lender and I've not had to ask my customers for that much detail.

However, there are some FCA driven regulatory changes coming into play in April which are going to change the way the industry assesses lending and a much more rigorous process will need to be adhered to. Don't know the details yet as I haven't been on the training course but maybe the lender you are using has already started to implement changes which they are aware of? Not saying this is necessarily the case but it is a possibility.

Of course lenders are entitled to ask for any information they feel fit to assess your application as they are lending you a substantial sum of money. (On their terms - not yours)

That said, I work for a notoriously strict lender and I've not had to ask my customers for that much detail.

However, there are some FCA driven regulatory changes coming into play in April which are going to change the way the industry assesses lending and a much more rigorous process will need to be adhered to. Don't know the details yet as I haven't been on the training course but maybe the lender you are using has already started to implement changes which they are aware of? Not saying this is necessarily the case but it is a possibility.

We had a mortgage several years ago not much spending info requested on application. We sold as moved to a different town and then rented for a bit until we knew whether we would stay or move again and have bought again last year but we we're asked lots more questions in application in particular about spending habits than asked five years earlier. Times have changed and lenders want more information.

Agh this has unreasonably got my goat! It's just such a stupid way to go about responsible lending. It's the arbitrariness of it all. Fixed payments, sure I can understand that. But what criteria are they judging your spending on? Is an excessive handbag collection ok? An avid fascination with model railways not?

If it was about responsible lending, then a list of fixed monthly payments would provide a fairer idea of income/expenditure balance than whether or not something magically tipped over the £250 mark.