As if it wasn’t bad enough that when applying for a mortgage you have to give the bank or your mortgage broker 3 months worth of your bank statements to sift through, new changes in the mortgage application process have meant the process is about to get even more personal.

Instead of just asking how much you earn and your set outgoings each month, applicants will now be asked much more in-depth questions about their lifestyle such as, if they take expensive holidays or spend a lot on socialising. This may seem a step too far but it makes sense. If you’re trying to get a full understanding of what someone can afford how they spend their money will have a large effect on this.

That said though, looking through 3 months of bank statements should really give the bank enough of a steer as to whether the applicant is living within their means or not and what they could afford in repayments.

With mortgage interest rates generally being very low due to the Bank of England setting the base rate at 0.5%, lenders are now being asked to “stress test” your ability to make repayments over a 5 year period.

Part of this includes assessing if applicants would still be able to make their mortgage repayments if the rate was 7%, according to the Council of Mortgage Lenders, this could easily mean a £200+ extra a month on a £100,000 home loan!

To see what your repayments would be at a higher rate use this calculator: http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

It will be interesting to see how much of a change this new legislation actually results in as very similar questions to these have been frequently asked already as more and more of the big lenders got ready for these changes. I, for example, have previously been asked how much I spend on food a week (I had no idea) and that was for a Buy to Let mortgage.

Until the full extent of how much this will actually change the application process is known, the best advice is probably just to make sure your spending is within your means and to start collecting the details your lender will need now so they are ready when you apply.

It is also probably a good idea to try to avoid buying any big ticket items, like a new sofa, or going on an expensive holiday just before applying for a mortgage since the bank won’t know if that is your normal spending or not.

To see the full article that sparked this post, click here http://www.bbc.co.uk/news/business-27128734