Transferring money to your mates with a joke in the reference might seem like a bit of fun, but a mortgage advisor says it could have an impact on your financial future.
People often forget that writing things like ‘hush money’ when you’re actually just paying for your share of the pizza will appear on your bank statement like that.
And when it comes to applying for a mortgage, banks go through all your statements in great detail.
While you might not be planning to buy a house right now, most banks need to go back at least three months, but in some circumstances, they may have to look through older statements.
This is because banks need to check where your money is coming from and make sure you’re not doing anything illegal or paying for anything that could affect your ability to pay the mortgage.
A mortgage advisor from KAG Financial posted a video titled ‘How to avoid embarrassment when applying for a mortgage’ to explain the problem.
She said: ‘Remember the money you transferred your pal? We see it and so does the lender.
‘”Money for drugs” is probably not the best thing to use. (This is actually tame compared to what we see).
‘Avoid joke references.’
As some people commented and panicked about all the jokes they’d made, the advisor clarified that it’s usually only the last 3-6 months they look at and added: ‘you’ve only got to worry if it’s something illegal’.
While it might not necessarily stop you getting a mortgage, it could delay things as the bank investigates your payments.
Some commented to say it had made them think about what they write.
One wrote: ‘I send myself money. And say things like… Bribe money. Hush money. Never even considered this.’
Another said: ‘Thank god it’s only three [months]! Some of my older references have been horrific.’
And while some of your references might just be silly names or swearing, others explained that it’s best to avoid those too – because you still might have to awkwardly explain them to your mortgage advisor or bank.
One person wrote: ‘I still got a mortgage with really bad ones showing. I was mortified giving my mortgage advisor my bank statements.’
So if you’re planning to buy a house soon, it might be best to avoid joke references for a few months.
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