Would-be borrowers whose friends send them payments with ‘comedy’ references could risk being turned down for mortgages if their bank statements are scrutinised, brokers have warned.
Mortage brokers said friends who send payments via their mobile phones to pay for a night out or other expense are often tempted to put in a funny reference that then ends up on the bank statement.
However, payments with words like ‘drugs’ or even swear words, could raise questions from lenders
“Lenders do sometimes look at bank statements very closely,” warned Sheffield-based broker Bob Riach from Riach Financial.
“I had a 19 year old customer recently who was buying with an inheritance on a zero-hours contract. The lender wanted to see all of her bank statements, and when I looked there were lots of little payments of £20 with ‘payment for sex’ written after them. It didn’t look good.
"I checked with her and it turned out that her friend thought it looked funny when she was paying her back for drinks after a night out.”
Increased affordability checks mean that more lenders than ever are taking a good look at bank statements when looking at whether to lend to customers, and one lender confirmed that joke references are often spotted.
Rob Barnard, director of sales at lender Pepper, said that the business reviews statements “to identify any patterns in income and expenditure”.
Mr Barnard said that the lender's underwriters had encountered “a number of joke references on bank statements in the past, but they have a pretty good sense of humour and so this hasn't prevented the case from proceeding”.
“Other lenders may take a sterner approach, however, so it is probably best to avoid making any jokes on a bank statement,” he added.
They were speaking after The Sun newspaper reported that borrowers had been turned down for mortgages due to ‘inappropriate language on bank statements’.
However, Daniel Bailey, mortgage broker at Middleton Finance, said that he had never come across this as an issue, and it wasn’t really what lenders are looking for.
“The reality is that they are looking for whether your payslips are real or not,” he said.
“They want to know whether the money is really coming in, and they check that carefully. I’ve had clients with loans from friends and family, and they scrutinise them for things like that, but I’ve never seen anyone scrutinised for bad language.”
Alan Cleary, managing director of lender Precise Mortgages, said there were a variety of things they were looking for on bank statements, but comedy references were not one of them.
"We would look at incomings and outgoings, and check regular payments," he said, "but we would also look at things like evidence of gambling or payday loans, which can show that a customer is in distress. Sometimes they generate additional questions."