Active discussions

Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Should I have declared this?

113 replies

stressingsusan · 31/10/2021 21:22

Dp and I currently going through a mortgage application for our dream home. Provided wage slips, lots of other information and it's all been approved.

I have a loan between myself and a family member that I pay back monthly. It's about £400 a month. I didn't declare this on the application because firstly it's a private loan between family and there's no record of it. And also because when we move and our current house sells I will be able to pay them back in a lump sum so in theory it won't affect our mortgage repayments anyway.

Our advisor recently mentioned I need to provide a bank statement and I'm now worried that this payment will show up and be questioned. Should I have declared this earlier on? Will it affect the application if it comes out? I'm really worried now.

OP posts:
SantasLittleHoHoHo · 31/10/2021 21:29

What's the reference for the payments on your bank statements? Do you pay £400 every month without fail / not different amounts / on the same day? I was told they do check for balances, wages coming in and payments going out (anything that might flag suspicion such as gambling payments or undeclared bank loans etc) when we applied for our mortgage. Not sure how much they do actually look into the details!

LivingLaVidaBabyShower · 31/10/2021 21:32

Whats the ref you put on the bank statement

Does it say "loan"
Or is or something generic?

I'd say nothing.
If flagged and questioned you can say there no more payments pending.
I'd also start paying relative in cash for a few months so you have at least one month without the payment

Original poster
stressingsusan · 31/10/2021 21:32

Yes it's the same amount monthly and the reference is quite obvious that it's a loan repayment.

The mortgage has already been approved so I'm hoping that if they were doing those sort of checks it would have been picked up on by now. But it might raise questions if I have to provide a full bank statement.

OP posts:
Toottooot · 31/10/2021 21:32

If your mortgage advisor was anything like the one I had, they will question almost every single thing on your statement. A payment for £400 every month will not go unnoticed if they are doing their job properly.

TotallySuper · 31/10/2021 21:32

Since it'll be gone before you start making the new mortgage payments its irrelevant. If it is picked up you'll just need to say you were voluntarily paying back a family member, it's not a formal loan and will be gone once the house is sold anyway. Dont over think it.

TotallySuper · 31/10/2021 21:33

If you've already had a mortgage offer then why are you worried? They've already checked your statements etc and aren't concerned so you're fine.

Toottooot · 31/10/2021 21:33

Approved or an agreement in principal?

Original poster
stressingsusan · 31/10/2021 21:34

@Toottooot they've not actually asked to see either of our bank statements until this point and it was only very loosely mentioned, not as if it was something urgently needed to progress the application.

OP posts:
Original poster
stressingsusan · 31/10/2021 21:36

Well we have instructed solicitors so guessing that means it's been approved?

OP posts:
TakeYourFinalPosition · 31/10/2021 21:36

Yeah, strictly speaking any standard arrangements should have been declared - although they may well have disregarded it if you’d let them know that it’d be paid off in full when you moved, or they may have made it a requirement of the mortgage that it’s paid off.

Did your mortgage advisor tell you not to declare it? Do they know about it?

They’d be best placed to know whether to declare it now before you send the statements or wait and see if they question it; it can vary based on the bank, but I’d be a bit cautious about their advice if they didn’t prepare you for this.

I hope it comes off alright for you.

TotallySuper · 31/10/2021 21:36

Just go for it it'll be fine, you can explain what it is and that it'll be gone anyway. The key word is voluntary repayment- its not a loan per se.

SantasLittleHoHoHo · 31/10/2021 21:37

Do you have a broker? They should hopefully be able to advise! If possible, get your relative to sign something saying it has now been repaid in full (as they know the cash will come in via the house sale) - and that last months payment was the last? Ready to provide in case they ask? Not sure if that's over doing it or not!

Original poster
stressingsusan · 31/10/2021 21:41

@TakeYourFinalPosition they don't know about it. I just never mentioned it. But I'm concerned that if and when I submit my bank statement they might start to ask questions and it might mean the offer is changed or withdrawn.

Credit checks and wage slips have all been completed and approved. I'm just worried this will throw a spanner in the works if it comes out.

OP posts:
Dee1975 · 31/10/2021 21:54

Have you physically had a mortgage offer or just an agreement in principle? (They are not doing their job properly if they haven’t asked for bank statements before the physical offer. But it’s not uncommon to do the application and get and AIP and then ask for proof of everything).
A mortgage adviser should be checking your bank statements and yes they will query it. But just tell them the truth. As long as the other numbers stack up (re: equity left from house sale once you pay the relative back is still enough deposit for next house) - Then it’s no problem.

Original poster
stressingsusan · 31/10/2021 21:58

@Dee1975 sorry I must sound really thick but I'm not sure. We had a meeting, provided wage slips and other details and they gave us an offer in principle. Then we had another meeting the following week and began instructing solicitors from that point. So I assumed it was all approved.

They still haven't seen either of our bank statements. Dh has sold another property that is covering the deposit so that's not an issue.

OP posts:
TotallySuper · 31/10/2021 22:02

You must know if you have a mortgage offer or not? It's usually about 10 pages long very detailed and says mortgage offer at the top. Either way just explain it to your broker if they ask once you've sent them your bank statements.

SnugKnights · 31/10/2021 22:02

They are likely to ask for proof it’ll be repaid, otherwise it would affect the affordability I guess? If you were still paying it after completion they might say you can’t afford the new mortgage.
They will almost definitely ask you what it is. Have they only asked for one month?

Original poster
stressingsusan · 31/10/2021 22:05

Yes just one month bank statement. If I can drag it out a bit I can pay cash next month or from a separate account and it won't show at all.

We have so far received everything via email although postal documents are on the way. I have a 6 page mortgage 'illustration' - would that be the official offer?

OP posts:
Cocomelt · 31/10/2021 22:05

I was in the same position as you with a loan to a family member. I never mentioned it & they never questioned it from my bank statements.
My family member had offered to sign an agreement that the loan wasn't official & didn't need to be paid back (or something along those lines) had it been a problem.

Sparklesocks · 31/10/2021 22:07

Normally when it’s approved you get an agreement in principle document (or decision in principle) from the lender saying the amount they’re happy to lend to you plus an expiry date of that offer. Have you not got that then?

TotallySuper · 31/10/2021 22:07

Just send your broker the statement and see what happens. If they've only asked for 1 month it's probably for money laundering purposes only so won't be looked at further by underwriters etc.

TotallySuper · 31/10/2021 22:08

@Sparklesocks

Normally when it’s approved you get an agreement in principle document (or decision in principle) from the lender saying the amount they’re happy to lend to you plus an expiry date of that offer. Have you not got that then?
Thats not correct you're confusing agreement in principle with a full mortgage offer.
Original poster
stressingsusan · 31/10/2021 22:08

@Sparklesocks yes we got that last week. We've had another meeting since then (and several more emails!) and begun instructing solicitors following the last meeting.

OP posts:
tiggerwhocamefortea · 31/10/2021 22:08

£60 a month payment to my cleaner was questioned so yes £400 is likely to be flagged

JagerPlease · 31/10/2021 22:08

My most recent mortgage they went through my bank statement line by line and asked about basically anything that was a repeat payment or any single transfer over £100 (eg I'd transferred a friend £300ish to pay a holiday balance that they asked about). I'd be very surprised if they didn't ask about it, it shouldn't be a problem as such although you'd likely need to prove it's going to be paid off