Mortgage query

[Tee20x]

Hi all

Wondering if someone could advise. I will soon (hopefully) be in a position to buy my first property & am starting to look into the mortgage process etc. I am currently on May leave so am waiting until I have returned to work to begin looking at properties but have a query about affordability assessments.

Does transferring money into own savings “look bad” for the assessment. By this I mean will the sums of money leaving the account make it look like I’m spending too much or will it be acknowledged that the money is being transferred into savings and ISAs and therefore not spent.

Probably explaining this really badly but in my case, once I get paid, I pay all my bills and then divert the majority of what is left into various savings accounts, leaving me with about £200-£300 to spend on whatever I like. Because of this my total outgoings is basically the same as my incoming but not through reckless spending.

Would it make sense in the period leading up to the mortgage application to stop doing this???

A mortgage advisor / broker / lender will ask to see statements for the origin and destination accounts - if you’re just transferring money from your current account into your savings account then you’ll be easily able to demonstrate that and it’s not suspicious at all, most people do it.

Regarding your mat leave - a lot of lenders will take a letter from your employer confirming your hours/pay on return into account for affordability assessments, so I'd suggest speaking to a mortgage advisor who will be able to advise.

I used to work in Mortgages and someone saving money each month is a good thing, even if your main account is only just in credit by the end of the month. If bank statements are requested they're just looking for undeclared credit and that you're not living to the max each month. They'll look at them and will see that they're savings. It's also helpful if you're using these savings for the deposit as you'll have evidence of it going across each month. Big thumbs up for most lenders.

Good to hear that this isn't an issue. I was concerned that whoever looks would see the deductions and assume that I am living beyond my means or something.

At what point do you start finding/discussions with a mortgage advisor? And should I be contacting one in the area I am looking to buy or where I am based now?

Gosh, feels so scary that it is becoming real - such a big commitment!

Still have a lot of reading up etc to do, as you can probably tell.

I remembered worrying about this exact same thing a few years ago. they never questioned it however if they do you can show them bank statements showing where it goes.
I knew what adviser I was using as they had being recommended so I found a property then got in contact with them. I'm sure you can find one first though to discuss how much you can lend,and what documents to start getting together ect.

You need to know how much you can borrow approximately. You can work it out with online calculator but it’s not really reliable and the real offer might differ significantly. I would make appointment with the mortgage advisor in your bank and have a chat with him about your options. When you are ready to buy you get agreement in principle but it’s valid only some time so you don’t need it very far in advance.
You don’t need the mortgage advisor in the area you are buying, it’s nothing to do with them.

Hi!
I was recommended a mortgage broker but I went through stuff with her first so we knew what we were able to lend and then started house hunting!
I had money going out monthly into savings whilst looking for somewhere and my broker knew it was into savings so guessing she would have told them that as I had no questions.
But obv you'll be able to provide proof of where it's going so it's no issue.
Exciting times!

I have various savings pots with money disappearing monthly into each. Was never asked about any of them 🧐 I thought I would be!