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Get into good mortgage habits

You might be surprised to know just how much mortgage lenders will scrutinise your spending habits, especially at the moment, with the financial adversity many people are facing due to the Coronavirus pandemic.

It’s worth being aware of what red flags they have so you have time to get your finances in shape before you apply for a mortgage. Mortgage lenders will be reviewing the obvious things such as income, bills, and debt but they’re likely to also look at many other factors, which could be more significant than you realise.

Sports betting

If regular and significant deposits are made to a gambling company, this could result in your mortgage application being turned down. Lenders are concerned about risk and active gambling is seen as a big risk.

Cash withdrawals

Withdrawing lots of cash on a regular basis is a red flag as there’s no paper trail to see where the money went. Lenders could conclude the money is being used for illegal activities, such as tax fraud, and so may decline your mortgage application.

Using PayPal

Large and regular PayPal payments could cause concern as the identity of the recipient is hidden. While the transactions may be genuine, a lender may think that the transactions are for activities such as gambling.

Using Buy Now, Pay Later

Use of these schemes should be limited as a lender may assume you don’t have the money to buy goods upfront, so they could view you as a risk.

Payday loans

Even if you have paid one of these off in full and on time, it can go against you as lenders will assume you were living beyond your means.


Most lenders will only accept mortgage applications based on actual salary, and not furloughed pay. However, different lenders have different requirements, and some are more flexible than others, so enlisting the help of a mortgage advisor to review your options is the best way forward.

If you would like any advice on getting mortgage ready, or to find out how to secure the best mortgage deal for you, please call smarthomes’ mortgage advisor Louise Lewis on 0121 744 4144 (option 2).

To find out more about smarthomes’ mortgage service:

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