Will lenders take average of savings or expect monthly amount?

Hi
I'm aiming to move house and I've spoken to few lenders over the phone and looking at ability to repay a mortgage amount stress tested at 2% , so need to show ability to pay around 1550 per month.

At the moment I'm paying
Mortgage: 700 pm
Loan: 400 pm (this will be paid off before I move or else out of proceeds of sale)

I don't have regular amount going into savings but over the past six months I've moved money into by Credit Union budget account and also revolut as follows:

Between April and November total amount:
Credit Union: 2,000
Revolut: 1,000
so approx 500 per month.

From chatting on phone they mentioned that average will be taken but I'm worried underwriters will want this presented more clearly and want to see regular savings pattern?

Can anyone advise if this would be ok to move ahead? I'm not under pressure to get AIP but wanted to have it in place before I put my own home on the market.

If I go to one lender and they reject the application, what is the impact? Does it show up on my credit rating or anything?

Any advice appreciated.

There's a good thread here

Being declined will just show that another bank has checked your credit record.

It was a long time ago but my savings history was a bit muddled when I applied for a mortgage. Back then there were still things called interest rates, and I moved deposits around pretty aggressively to take advantage of the best yield.

So four years of savings had statements from nine different accounts or something. During the underwriting this got queried.

So I put together a table which basically explained where I had the balances at which time, showing pretty consistent growth. No idea if it helped, but I doubt it hindered, and I got approval.

NoRegretsCoyote - OK good idea about the table to show just in case any issues.
RedOnion - thanks for the info on that and the link.

I would be more worried about whether you can afford this new mortgage. You are currently trying to show that you have a repayment capacity of €1600/pm but it is not clear whether you actually have savings or have just moved money around to look like regular saving.

I would also be worried about including the €400 loan repayment depending on the purpose of the loan. If, for example, you needed that loan to pay for a typical recuuring expense such as a car upgrade, what happens in 4/5 years when you need another upgrade but now have a €1550 mortgage??

Personally I wouldn't be comfortable if I could barely meet the repayment capacity and not have any other ability to save. You might get more useful responses if you gave more detail and follow the money makeover template below.

_OkGo_ said:

I would be more worried about whether you can afford this new mortgage. You are currently trying to show that you have a repayment capacity of €1600/pm but it is not clear whether you actually have savings or have just moved money around to look like regular saving.

I would also be worried about including the €400 loan repayment depending on the purpose of the loan. If, for example, you needed that loan to pay for a typical recuuring expense such as a car upgrade, what happens in 4/5 years when you need another upgrade but now have a €1550 mortgage??

Personally I wouldn't be comfortable if I could barely meet the repayment capacity and not have any other ability to save. You might get more useful responses if you gave more detail and follow the money makeover template below.

Click to expand...

OK some really good points there - appreciate you mentioning those, some more info below:

They are actual savings I have made but I didn't setup a regular direct debit and just transfer each month what I can save. Certain months that may be higher as other months there may be an outlay on oil or something (as I buy large volume to get discount on price). The savings are real alright but possibly could be documented more clearly and be more regular

The loan relates to once off solicitor payments for divorce proceedings and some other costs I incurred a number of years back.

I did have a car loan previously which is now paid off. If I need another car loan I would be purchasing second hand and would cap that at around 7K max.

I live rural and I have additional costs which I expect to reduce if I move to smaller property.

The 207K mortgage (which is max I can get and may not draw down that amount) over say 18 years @ 3% would come in around 1242 but the loans are stress tested . I'd have to see what rate I can avail of etc.

The money makeover is interesting - I will look at that and separately may post up on that one and give more detail , thanks .