Dave Beans

Santander "to Start Looking At Discretionary Spending, Including Presents & Subscriptions During Mortgage Applications"

32 posts in this topic

http://www.dailymail.co.uk/news/article-2106173/Want-mortgage-Tell-spend-presents-Bank-delves-deeper-personal-lives-penalise-extravagance.html

Families who take foreign holidays, splash out on subscriptions or buy expensive presents to mark birthdays or Christmas face being turned down for a mortgage. The new rules from one of the biggest banks will penalise any applicant deemed to be extravagant. Santander – which is the nation’s second largest lender of mortgages – is the first to introduce the intrusive guidelines. But last night experts said they feared other banks and building societies will follow suit.

Matt Griffith, a spokesman for Priced Out campaign group for affordable homes, said: ‘This is ridiculous – no one fails to repay their home loan because they buy gifts for their grandma. ‘Banks are constricting lending to first-time buyers while concentrating on the richer pickings of equity-rich homeowners and investors.

‘As banks scrabble to preserve cash, it seems like we are on the verge of another mortgage crunch.’

The Spanish bank’s questions on occasional spending are far in excess of what is officially demanded by the Financial Services Authority. There was uproar when the City watchdog originally proposed analysing every aspect of household spending but it later concluded only regular spending on essentials and bills needed to be taken into account. Santander’s decision will put a further squeeze on home loan lending at a time when getting a mortgage is already far from easy.

The bank has already taken steps to slash cheap mortgage deals by telling those who want an interest-only loan to stump up 50 per cent of the property’s purchase price. Britain’s biggest mortgage lender, Lloyds Group, which includes Halifax and Bank of Scotland, has imposed similar curbs on interest-only deals. For a generation, these deals have helped the young and cash-strapped families to get on the housing ladder.

Ray Boulger of broker John Charcol said: ‘Santander has crossed the line with this as irregular expenditure is very difficult to work out. It’s a common problem that people always tend to underestimate how much they spend, even though it may be genuinely thought through.’

David Hollingworth of mortgage broker London & Country said: ‘When people take out a mortgage, it’s the regular spending commitments which indicate how well they’ll be able to manage their money. ‘People change their habits when they buy a house. They don’t go out as much, and they spend less on birthdays and holidays because they have a mortgage to pay.’

Santander claims it has been making checks on ‘one-off spending’ for several years. However, experts say the announcement about making more onerous checks was only made this week.

The bank has sent out new forms to brokers which ask homebuyers to detail regular expenditure such as bills, school fees, transport, entertainment and clothing. In another column it asks for non-regular expenditure, which it specifically sets out as subscriptions, holidays, miscellaneous goods and services, religious festivals and birthdays. The previous application process didn’t ask for any of this detail. Buyers are not allowed to enter a zero. Doing so will see their application rejected.

The changes will enable us to collect more information upfront about borrowers’ monthly expenditure. This will also make it easier for people to provide all of this information when submitting cases to us.

- SANTANDER

The crackdown is a far cry from the days before the credit crunch in 2007. Then, banks would regularly approve loans for 25 per cent more than the value of their property. Even buyers with a poor record of repaying debts could be granted a loan without having to prove what they earned.

As a result, these so-called self-certification mortgages were nicknamed ‘liar loans’.

Most mortgage providers now require buyers to submit bank statements for three months before deciding whether their application is approved. Previously, salaries would be checked through an annual P60 form and monthly wage slips. But now banks and building societies want the bank statements to check for other payments. A Santander spokesman said: ‘The changes will enable us to collect more information upfront about borrowers’ monthly expenditure. This will also make it easier for people to provide all of this information when submitting cases to us.’

A spokesman for trade body the Council of Mortgage Lenders said: ‘It’s up to each lender to decide what information is important from the borrower in order to make a decision on affordability.’

article-0-11E5A7A9000005DC-542_472x288.jpg

Edited by Dave Beans

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historical spending patterns back 6 years into the middle of the credit boom .!...could be difficult for some

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"David Hollingworth of mortgage broker London & Country said:...

‘People change their habits when they buy a house. They don’t go out as much, and they spend less on birthdays and holidays because they have a mortgage to pay"

Sounds to me like a mortgage makes life a bundle of joy.

That's one desperate mortgage broker.

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So if they need 6 years of history so they can work out if you've been buying too many pairs of underpants, or putting 2 sugars in your tea, will this not mean no first time buyers younger than 28?... Leave uni at 21, then 6 years of living like a monk, plus one year while a private detective combs through every receipt. <_<

On the plus side, it means no MP will ever get a mortgage :lol:

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"David Hollingworth of mortgage broker London & Country said:...

‘People change their habits when they buy a house. They don’t go out as much, and they spend less on birthdays and holidays because they have a mortgage to pay"

Sounds to me like a mortgage makes life a bundle of joy.

That's one desperate mortgage broker.

Sounds like high house prices destroy the economy!

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as subscriptions, holidays, miscellaneous goods and services, religious festivals and birthdays. The previous application process didn’t ask for any of this detail. Buyers are not allowed to enter a zero. Doing so will see their application rejected.

I don't have any subscriptions but can't put a zero?

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That's a spectacular own goal !

Buckers

"David Hollingworth of mortgage broker London & Country said:...

‘People change their habits when they buy a house. They don’t go out as much, and they spend less on birthdays and holidays because they have a mortgage to pay"

Sounds to me like a mortgage makes life a bundle of joy.

That's one desperate mortgage broker.

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"

Matt Griffith, a spokesman for Priced Out campaign group for affordable homes, said: ‘This is ridiculous – no one fails to repay their home loan because they buy gifts for their grandma. ‘Banks are constricting lending to first-time buyers while concentrating on the richer pickings of equity-rich homeowners and investors. "

Banks are sensible not wanting to lend to people who list shopping or drinking as a hobby maybe?

In the old days if you wanted a mortgage you

- had to save for a deposit

- had to show a good history of saving

- were generally expected to scrimp and save to furnish the place too and not have everything shiny and new.

The sooner we return to this, the more chance prices have of going to sensible levels.

The banks lending money that won't get repaid is a waste of time.

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I don't have any subscriptions but can't put a zero?

Quick! Subscribe to some money and prudent finance magazine http://www.letssubscribe.com/?product=7813 3 issues for £1, how prudent is that eh! I wonder if they'll accept a 1 if not a 0

"

Matt Griffith, a spokesman for Priced Out campaign group for affordable homes, said: ‘This is ridiculous – no one fails to repay their home loan because they buy gifts for their grandma. ‘Banks are constricting lending to first-time buyers while concentrating on the richer pickings of equity-rich homeowners and investors. "

Banks are sensible not wanting to lend to people who list shopping or drinking as a hobby maybe?

In the old days if you wanted a mortgage you

- had to save for a deposit

- had to show a good history of saving

- were generally expected to scrimp and save to furnish the place too and not have everything shiny and new.

The sooner we return to this, the more chance prices have of going to sensible levels.

The banks lending money that won't get repaid is a waste of time.

I can recall opening building society accounts with that very goal, that's what they wanted to see. Then along came the age of big bang and show off Martini ads "we're liquid now" and it was all chucked out of the window by the red braces wearing coke snorting tossers, and now they have ruined everyone's life

Edited by inflating

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I can recall opening building society accounts with that very goal, that's what they wanted to see. Then along came the age of big bang and show off Martini ads "we're liquid now" and it was all chucked out of the window by the red braces wearing coke snorting tossers, and now they have ruined everyone's life

Indeed.

Could building societies rise again?

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I wonder how much Santander has lost out on in the Spanish housing crash? Too little checking too late perhaps?

In the end your ability to pay your mortgage is primarily determined by one fact - do you have a job, do you earn enough to fund the mortgage (allowing for kids/families) and how secure is your job.

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I wonder how much Santander has lost out on in the Spanish housing crash? Too little checking too late perhaps?

In the end your ability to pay your mortgage is primarily determined by one fact - do you have a job, do you earn enough to fund the mortgage (allowing for kids/families) and how secure is your job.

You have to shut the door at some point.

Our govt wants banks to prop the door open.

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Satander being the bank that wants 50% deposit on IR only mortgages. Either they are getting commonsense - a bit late - or they are deep in it IMPO.

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Our govt wants banks to prop the door open.

And there was me wasting my vote, thinking the tories would be different, the same Sir Humphrey in the shadows forever in charge

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This looks to me like a story with two halves. If you're spendthrift, you get less mortgage. But if you're frugal, you get more.

If we'd had that kind of thing back in the 1980s, maybe I'd've qualified for a mortgage of 3-4xpay and got my foot on that housing ladder sometime between starting work in central London in 1983 and fleeing to Germany in 1985. 'Cos set against renting in the 1980s, that would've been attractive even at interest rates of 15%.

On the other hand, how are they going to check. Is this the point to page Eric?

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"David Hollingworth of mortgage broker London & Country said:...

‘People change their habits when they buy a house. They don’t go out as much, and they spend less on birthdays and holidays because they have a mortgage to pay"

Sounds to me like a mortgage makes life a bundle of joy.

That's one desperate mortgage broker.

Well I guess at least "owners" have more opportunity to spend time and money doing, painting, decorating and DIY. :lol:

Wonder why so many "owners" in the UK still assume renters are the ones who are the second class citizens?

Most of my friends and family are still baffled as to why we would choose to rent rather than buy our current family home.

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Amazing how Santander are still in business after taking over so many crappy UK banks and not closing them.,

There are 3 Santanders within 100 yards of one another at a town near me. IIRC one used to be the Alliance and Leicester, another the Bradford and Bingley, and the third Abbey National.

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Moved an ISA from Santander a while ago. When doing so the girl asked me was it from Santander. I didn't confirm at first but asked her if they were getting many transfers from Santander. She said they were getting lots of transfers the majority of which were from Santander.

Undercover bank run anyone ?

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"David Hollingworth of mortgage broker London & Country said:...

‘People change their habits when they buy a house. They don’t go out as much, and they spend less on birthdays and holidays because they have a mortgage to pay"

Sounds to me like a mortgage makes life a bundle of joy.

That's one desperate mortgage broker.

That's a cracker from a mortgage broker! Somebody tell ITN News Business Editor Laura Kuennsberg.....

"Ray Boulger of broker John Charcol said: ‘Santander has crossed the line with this as irregular expenditure "

Shouldn't that be

"Ray Boulger of broker John Charcol who went into administration in 2010"?

How many times does he want John Charcol to get in trouble? Why is he even given a voice?

http://citywire.co.uk/new-model-adviser/towergate-financial-rescues-john-charcol-from-administration/a384055

Edited by Democorruptcy

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Undercover bank run anyone ?

Looks like it to me, and has done for some time (imho etc etc)

This is desparate, back covering, horse/stable door/bolted stuff really. Whether you like it or not, all this is very bad for their reputation. I've got a mortgage with them, but wouldn't put savings anywhere near them.

It is diifficult to take seriously this kind of action. Cloaked as it is in some sort of moral and fiscal responsibility - when it's really just another drunk waking up after an enormous bender, bursting into tears and swearing never again.

TOO late - null points.

Edited by iamdamosuzuki

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