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Does gambling affect your mortgage application?

Yes, gambling can affect your mortgage application but will depend on a number of factors, and will vary from person to person.

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Matthew Boyle

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The simple fact that you like to gamble will not in itself be enough to affect your application however if you are taking out credit to gamble then this is likely to be a problem.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

When won’t gambling affect your mortgage application?

If you’re betting a few pounds of your spending money here and there, and you’re not taking out credit to do so, this is unlikely to have an impact. Underwriters – the people who effectively stand between you and your new home – want to assess your ability to comfortably service a loan. They’re not there to make any moral judgements on your spending habits.

When will gambling affect your mortgage application?

Like gamblers, mortgage lenders have a set amount of funds available and don’t want to lose their money. They will look to avoid this by lending to applicants who represent the least risk. The select lenders who are willing to consider higher risk applicants will mitigate risk by charging higher interest rates and offering smaller sums.

Regulations introduced in 2014 and 2017 mean that lenders have to assess the affordability of a loan for an applicant in much closer detail than was previously required. Part of this process will be looking at the transactions on your bank statements. If a would-be lender sees regular outgoings to gambling companies, this is likely to make you a less appealing prospect than somebody who say, makes regular deposits into savings instead. Don’t make the mistake of thinking that if you often transfer winnings back into the account, that should reassure prospective mortgage providers – it won’t.

Perhaps most importantly, you should never borrow money to finance gambling. If you’re gambling while going into your overdraft, using transfers or cash advances from a credit card, or even applying for short-term loans then this tells lenders that you’re happy to effectively gamble with their money, and that you’re prioritising gambling over responsibly repaying debts. Using credit while gambling will be a major red flag to underwriters, and defaulting on any credit that you have could be worse still.

There are other factors worth considering too, such as the fact that a regular gambling habit will most likely mean you have less of a savings balance for a deposit, which in turn can have a negative impact on your application. Accruing a large amount of personal debt will also cast doubt in a lender’s mind about your ability to service a loan. In short, if your gambling causes problems with your finances, it could definitely cause a problem with your mortgage application.

If the money you spend on gambling represents a significant portion of your ongoing expenses, the lender or mortgage underwriter may be concerned that there is a higher chance of you getting into financial difficulties at some point in the future (after all, mortgages are long-term products) and being unable to keep up with repayments. In some cases, this could mean that your mortgage application is declined.

Tips to increase your chances of mortgage approval

  • Stop gambling. It’s an obvious piece of advice but one that’s worth mentioning. Not only will this remove any chance of gambling affecting your application, it will also help you to save more money for your deposit, bringing down your loan-to-value ratio (LTV) and making you an even safer prospect to a bank or building society.
  • Use a separate account. If you’re worried about gambling transactions showing up on your bank statement when you supply proof of income and expenditure to a lender, you could fund your gambling transactions from an account that is separate to your current account. If it’s a major ongoing expense, however, hiding it away isn’t the answer.
  • Get a clear savings history. Many lenders only require bank statements from the past three to six months when you apply for a loan. They are likely to calculate your average spend on gambling, so if you stop gambling long enough to develop a “cleaner” transaction history you can improve your chances of approval.
  • Pay off debt. Your debt-to-income ratio is an important factor lenders look at when assessing your mortgage application. By paying off your debt and building a documented history of disciplined savings, you can greatly increase the chances of your application being approved.
  • Fix your credit history. An imperfect credit record can have a hugely detrimental effect on your borrowing power, so check to see whether you can fix any mistakes or black marks on your credit record.

What if I’m a professional gambler?

If you make a living by gambling, perhaps by working as professional poker player or spread betting, you will still be considered by many lenders.

For the most part, you will be assessed similarly to any other self-employed applicant.

You can definitely expect them to monitor the stability of your income and outgoings. The higher and more consistent your profits, the better. Applicants with a large deposit and healthy credit score will be looked upon favourably. Indeed, if you can show many years of consistent profits, this will look even better to lenders.

However, it’s common that the lender may also take extra steps to ensure that you’re a safe applicant to lend money to.

They may consider:

  • The size of your transactions. If you’re betting huge chunks of your income on single outcomes, you’re likely to be considered more of a risk.
  • The type of gambling. Forms of gambling which require an element of skill as well as luck are likely to be considered a safer bet for lenders. Poker players would be more attractive than those playing online slots or roulette, for example.
  • Other sources of income. If gambling forms 100% of your income, a slow month is more likely to affect your ability to meet your mortgage payment. A lender would prefer if you had other forms of income to fall back on.

    • One factor which may harm many gambler’s applications is providing proof of income. Whereas most self-employed mortgage applicants can provide SA302 tax forms, professional gamblers are unlikely to have these. After all, gambling winnings are tax-free.

    It can be difficult for professional gamblers to demonstrate a steady income without these forms, because their bank statements are typically flooded with an overwhelming amount of ins and outs. Ideally, they’ll document their profits themselves and be able to provide these calculations to the mortgage provider.

    Does gambling affect my credit score?

    Provided you’re not borrowing money to fund your gambling, your credit score won’t be affected by it. After all, your credit report exists only to assess your ability to pay back a loan, not make moral judgments about how you spend your money. Learn more about gambling and your credit score. You can also check your credit score here.

    Speak to a specialist lender

    If you are struggling to get a mortgage via the traditional methods you could speak to a specialist lender. They can provide the expertise on a particular area of lending where you’re looking for assistance.

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    How do mortgage lenders feel about debts from gambling?

    We asked some of the UK’s major mortgage lenders about their policies on mortgage applicants with debts caused by gambling. Here is what they told us.

    ProviderWhat it told usCompare
    BarclaysWe have no specific policy on this.Compare with broker
    Halifax/Lloyds Bank/Bank of ScotlandWhere we become aware of gambling debts, such cases will be referred to our underwriting function to consider the ongoing sustainability of the mortgage.Compare with broker
    Virgin MoneyAll debts are considered as part of the applicant’s affordability assessment.Compare with broker
    Yorkshire BankApplicants with debts from gambling will still be considered.Compare with broker

    The bottom line

    So, there are various circumstances where gambling can present issues for mortgage applicants, and gambling is one of many factors that can affect your mortgage application.

    With the proliferation of betting companies and the increasing opportunities for online gambling, this issue could become a much more significant obstacle to UK borrowers in coming years. If you do like a punt every now and then, make sure you take the necessary steps to prevent your gambling from affecting your mortgage application.

    Gambling addiction is a serious personal problem that tends to lead to financial issues, so most importantly of all, if gambling is a problem for you, take action today and get the help you need to quit.

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2 Responses

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    AnonymousJanuary 15, 2019

    I am going to apply for a mortgage very soon. On my bank statements, I have spent quite a bit on online gambling, I have had the Disposable Income. Now I am looking at getting a mortgage. I have stopped gambling but it still comes up in my statements, how badly will this affect my mortgage application?

    Reply
      AvatarFinder
      JhezelynJanuary 17, 2019Finder

      Hello,

      Thank you for your comment.

      Technically, yes, it will affect your mortgage application. If you are gambling with your ‘spare money’ and it is not affecting your ability to meet your outgoings and financial commitments it is less likely to be a problem. You’re advised to not gamble using funds from your bank account, to make your bank accounts look healthy by not going overdrawn at all which will also help your credit files.

      Generally speaking, they will only ask for 3 months statements so if there is nothing on those then there’s nothing to worry about. But if your clear for a year then you will be fine.

      You’re also advised to contact a mortgage broker so you can discuss options based on your needs.

      Regards,
      Jhezelyn

      Reply
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