lifestyle choices and Mortgages
If you have been following the news you may have read about a lifestyle choice preventing someone from getting a mortgage? The gentleman in question was purported to have been addicted to tanning injections and cited this as a reason for his decline by perhaps the best-known specialist lender in the land.
We will never be privy to the complete rationale for the decline due to client confidentiality but it brings into focus a grey area in the affordability assessment.
I’m a Mortgage Broker can say with certainty that the Mortgage Lenders granules their calculations in different ways but regular medical treatments, (cosmetic or otherwise) is not a heading that typically appears on their calculations so in this respect I have some sympathy with the gentleman in question.
The Mortgage Lender in question, however, does normally only accept applications via a Mortgage Professional and they should have been aware that a £500 a month commitment, allegedly and importantly; a regular outgoing, reduces the gentlemen’s borrowing potential. Lets be honest the Broker knows if this was a car loan it would have been the first thing to leave their lips to the Mortgage Lender, in fact, the application form would have prompted them. Golden glow or BMW its the net impact on the amount left in his bank account to service the mortgage payments every month. If the disclosure had of been prior to application may the disappointment would have been less and certainly not headline news.
The Mortgage Lender stated they do not decline on “lifestyle” which was seemingly the impression he got.
The gentleman in question felt they may have googled him and uncovered his notoriety on TV. Sorry to spoil the fun but its more likely they checked his bank statements and thought he couldn’t afford it.
The perhaps slanted reporting suggested that the Mortgage Lender never declines on “lifestyle”. Maybe a PR deflection, on extraction from longer comment, and I’m not in a position to argue with them.
However more generally I would say its common to see such questions as how much to you spend on eating out, holidays, gym membership, etc on Mortgage Lenders systems? Gambling and use of Payday style loans are likely to have begun as lifestyle choices and can affect a Mortgage Lender’s willingness to lend. I think the truth is probably not that a Mortgage Lender ignores lifestyle choices more so they look for excesses above the norm and their potential impact on their mortgage payment as a result.
Niche Advice is a Mortgage Broker that will work out your affordability before the quote, a decision in principle and full mortgage application. Care needs to taken as it can be a moving target. This will ensure you have a clear idea of the outcome at the earliest point.