Millions of bank account holders risk having mortgage cancelled over payment references

Households could have mortgages REJECTED in a cruel blow, experts have warned.
-Credit:Reach Publishing Services Limited


Millions of bank account holders have been urged to ensure they are staying sensible with their payment references when transferring cash to friends and family. Households could have mortgages REJECTED in a cruel blow, experts have warned.

Jonathan Bone, head of mortgages at Better.co.uk, said: "We’ve all been in that situation where we have to transfer a friend or family member money that you owe them. Whether that is for a pizza at the end of a cosy evening in or a larger amount of money, it's important to think about the reference you give for the transaction."

Mr Bone continued, saying ahead of the stamp duty changes from the Labour Party government this year: "While you might think it would be funny to make an inappropriate joke as to what the person is receiving money for, it can actually lead to your mortgage application being rejected by lenders.

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"As part of a mortgage application process, you usually have to provide three months worth of bank statements for the lender to review, so if you have ‘questionable’ spending on these, an application may automatically be declined with no option to appeal."

He said: "While buying a lottery ticket every so often is unlikely to see your application rejected completely, it's important to be careful about making gambling bets regularly. A lender will take each gambling transaction into account, so if it is causing problems with your finances (such as habitual spending), it may raise concern that you are unreliable at making repayments."

Speaking out, Mr Bone said: "Most lenders want proof that you have been working in a job that has provided you with a stable income for a while. While a higher income might seem like a good thing and improve your affordability, someone who is still in their probationary period at work may seem riskier to some lenders—it completely depends on certain lenders acceptance criteria."