Most residential mortgages require borrowers to submit at least three months’ worth of bank statements. Some lenders including Santander, Halifax and Virgin Money have told borrowers that they do not want to see bank statements. Instead, they are relying on a borrower’s credit score to assess affordability. They will still probably want proof of the borrower’s salary but are not concerned about proof of their outgoing expenses.
Bridging loan lenders are also less concerned about someone proving their financial status or creditworthiness. They put greater importance on the exit strategy that shows when and how the loan will be repaid in full. The property used to secure the loan has to have sufficient value to cover the loan.
Businesses applying for commercial mortgages are expected to submit accounts to prove that their business is operating profitably and can afford the mortgage repayments. If the mortgage is for commercial property they intend to rent to commercial tenants, the lender needs to be satisfied that the expected rent levels will cover the mortgage repayments.
Buy to let mortgage borrowers need a sound business plan to show how rents will more than cover mortgage repayments.
Though banks may require less financial paperwork from residential mortgage applications, they are still careful to make sure that the borrower will be able to repay any mortgage. No matter if the borrower is an individual, a partnership or a company, loan applications will be refused if the lender believes that the borrower cannot afford the mortgage.