Do we need to limit expenditures ahead of mortgage (bank checking statements)

[Wannabemamas]

I know banks want to see statements during mortgage applications and this is mainly to verify income and fixed outgoings like debt, childcare etc but what about other random expenses like take outs and shopping? Do they even care about those? Planning to apply for a mortgage soon, should we try and spend less to appear more responsible? (Not that we splash that much, we save every month etc but do spend a fair amount in coffees and take outs, it’s our only splurge)

Aside from checking your regular income and a quick look at outgoings, they will be looking for anything which might be an unusual transaction, either in or out. It is all to do with money laundering really.

They care about anything that is a regular expenditure, so if you've got Costa on your account every day they will include that as a commitment and reduce the amount you can borrow accordingly.
They generally want the last three months although this can vary.

This isn't true at all. Nobody is committed to spending on a Costa everyday, and a lot wouldn't do once they had a mortgage.
Committed spending is loans, maintenance, credit cards. Essential expenditure is food and bills. Basic living expenses are clothing, household goods and childcare. Anything else is classed as lifestyle expenditure and providing you aren't going overdrawn each month because of it nobody will bat an eyelash. The exception is regular payments to gambling or sports betting sites.

They aren’t per se worried about takeaways and costas (on the basis you could cut those out if needed, and if you can afford it entirely up to you how you spend your money. They want to work out will you default on this money:

. They are really looking for things like:

• Payments for credit cards/personal loans (particularly if you haven’t declared them)
• Regularly using your overdraft
• Fixed payments - childcare, school fees (things you probably couldn’t cut out easily)
• Direct debits bouncing - again shows poor financial management

No, they really won't. It is clearly discretionary spending.

They look quite in-depth, we were questioned on several things, that are regular payments like holidays monthly payment, window cleaner, car valeter, hair/nails etc. they all get taken into account on the affordability scoring. they told us pubs and gambling sites were a red flag too.

We cut down as much expenditure as we could in the 6 months prior to applying to put us in as strong position as we could to get the best rate.

It depends whether your mortgage payment (and a good margin in case of rate increases) can be met easily. We didn't even have to show bank accounts but we were borrowing less that 50% ltv and payments were no more than rent (around 20% of income) if you're looking to borrow a lot more ltv and crucially your payments are more than 1-3 or take home pay they will be looking to see if you can comfortably afford them. You know whether you need to make lifestyle changes to afford the mortgage, if so you need to make them now

I think if your accounts show you transferring to savings or having spare at the end of the month that helps.

Also we got interrogated once about a transfer to another account of our own - think they were checking whether it was used for something they needed to know about, like a loan.

I would so no unnecessary spending or use cash

I'm an Underwriter so look at bank statements daily. I don't care about what you spend on coffee or at the pub or whether you have a cleaner etc so it's odd that people are saying this would be an issue
We're looking for your salary to match your payslip, no unauthorised od usage or going beyond your limit. No bounced payments.
No undeclared debt or childcare etc
No excessive gambling
Wouldn't query transfers into another account in your name as very common
Might query a large transaction in or out from a third party
Might query a direct debit or standing order that can't be easily googled
Most peoples bank stats are much like my own. Mainly just get paid, all the bills go out and you spend the rest and save a bit