May 16, 2011 How you run your current account is of the utmost importance when applying for a mortgage. Yes, it is true that online gambling is frowned up, the annual bet on the National isn't too bad but if you gamble a lot and are borderline for approval then it could be the factor that results in a decline. How you run your current account is of the utmost importance when applying for a mortgage. Yes, it is true that online gambling is frowned up, the annual bet on the National isn't too bad but if you gamble a lot and are borderline for approval then it could be the factor that results in a decline.

• Online Gambling Affect Mortgage Payments
• Online Gambling Affect Mortgage Interest
• Online Gambling Affect Mortgage Companies
• Online Gambling Affect Mortgage Rates

Does gambling affect your mortgage application?

A borrower that gambles presents an increased risk to a lender. Think of it from their perspective; They’re lending out potentially thousands of pounds, so they want to feel sure that they’ll get it back. A person who frequently gambles chunks of their income may be less able to pay their mortgage on time and full.

A lot of people wonder just how strict lenders are when it comes to gambling and mortgages and because of uncertainty, some people avoid applying at all.

We’ve answered the most frequently asked questions around this topic to help you make an informed decision about how to apply for a mortgage after gambling.

Can a lender decline your mortgage application for minor gambling?

So what happens if you only ever gamble small amounts here and there?

Well, the good news is that the type of gambling, the amount of money you bet and the frequency in which you do it, can all play a part when lenders make their decision.

Online Gambling Affect Mortgage Payments

If your bank statements show a pattern of unaffordable, high risk betting, you may find your choice of lenders is drastically reduced. Lenders will compare the level of gambling in relation to your income so small flutters that don’t occur often or affect your finances may be accepted.

If you’re unsure about whether the amount you gamble could stop you from getting a mortgage, ask a mortgage broker for a quick call.

Can lenders see that I have gambled on my bank statements?

Yes, when you apply for a mortgage lenders will want to look at your bank statements from the past 3 months, to determine your affordability. Some lenders can ask applicants to go back even further and supply statements and proof of income from 12 months ago.

Online Gambling Affect Mortgage Interest

This is something to keep in mind if you’re applying for a mortgage in the near future as any

indication of gambling or overspending can be seen by the lender and may affect your mortgage application.

Can professional gamblers get a mortgage?

The nature of gambling is unpredictable and even those who derive their income from gambling will experience periods of fluctuation. Lenders look at affordability and income closely when assessing the risk of a borrower and periods of low income can create concerns about how the borrower will pay back their loan.

In most instances, lenders won’t accept income from gambling and will require the borrower to have income from a more predictable source i.e. a salary.

However, each lender has their own set of criteria when it comes to approving a mortgage for a gambler, professional or not, so even in instances where the borrower has been declined for a mortgage because of gambling, another lender may be found elsewhere.

Finding a mortgage lender that accepts gambling transactions

The key to finding the right mortgage for you lies in comparing a wide range of mortgage products, interest rates and lender agreements.

Without the knowledge of where to look or how to negotiate the best deals, it can feel like you’re taking a leap in the dark, especially when not all lenders display their rates or criteria on comparison sites.

Our mortgage brokers have access to hundreds of lender rates and have built up relationships with a variety of lenders across the UK. They work on your behalf to find the lenders that are most likely to accept you, while also aiming to save you money.

Are there things I can do to improve my mortgage application if I gamble?

The first thing to do if you’re worried that gambling will affect your mortgage application is ask a mortgage broker for their advice. They’ll take the time to listen to what you need from your mortgage and will review your circumstances to find the best possible route.

Depending on your circumstances, it may also be helpful to:

• Reduce your debt to income ratio

• Reduce the amount and frequency you gamble

• Check your credit report for bad credit

Can having a larger deposit help?

Having a larger deposit of up to 30% can improve your choice of lenders and rates if you have gambling on your statements as with most lenders, the higher the deposit, the lower the risk.

This can vary between lenders, as can the amount you may need to upfront. To get an accurate reflection of what you may need to deposit as mortgage applicant who gambles, ask a professional who can calculate an estimate.

Bank statements provide lenders an insight into the lives of prospective borrowers, but some activities could result in an application unexpectedly being turned down.

Providers are looking for any clues that customers may struggle to keep up with repayments in the future.

Here are the bank statement activities that brokers say act as a red flag to lenders, and at the worst, mean applications are rejected.

1) Gambling habits
Bank statements detailing payments to bookies can instantly stop an application in its tracks, brokers warned – even when the borrower is an otherwise perfect candidate.

Malcolm Davidson, managing director at mortgage broker UK Moneyman, told us of a case in which one of his clients had a perfect credit history, but a prospective lender identified a gambling habit on bank statements.

Davidson said: “It was really the type of customer that any lender would normally lend to. They gambled with their own money and there was no overdraft.”

After requesting more information, the lender eventually declined the case. Davidson said the client had effectively been punished for their choice of vice.

Rachel Lummis from Xpress mortgages agreed gambling transactions cause problems.

She said: “Many of us like a flutter on the grand national – that won’t affect you – but if you have daily amounts going out to companies, such as Bet Fair or Ladbrokes then that can cause an issue.”

2) Being overdrawn
Dipping into overdrafts could suggest a prospective borrower struggles to manage their money effectively and this will set alarm bells ringing for lenders.

Lummis said: “A rather common mistake is when a bank offers you that service of letting you go overdrawn, however as long as you make payment by the afternoon then it is fine.

“That is rather generous of them and you are playing by the rules but on your statement, it will show those several transactions as over your overdraft.

“The fact that it’s sorted by the end of the day and accepted by your bank doesn’t matter.

“Other lenders will see this as going over your overdraft limit and if you do this frequently that’s enough for your mortgage to be declined.”

3) Payday loans
Nick Morrey, product technical manager at John Charcol, said payday loans will raise problems with any mainstream lender.

He added: “It implies you cannot keep to your monthly net income so a new, large mortgage commitment could be a problem in the future.”

Bounced direct debits, where the account holder has not had enough funds in their account at the end of the month is another stumbling block, Davidson advised.

4) Unexplained cash deposits
Regular payments from family and friends could be viewed as a financial commitment and affect overall affordability, Morrey warned.

Online Gambling Affect Mortgage Companies

Borrowers will also need to have a reasonable explanation for any unusual payments or larger payments.

One-off cash payments can raise fears among lenders over money laundering.

Online Gambling Affect Mortgage Rates

And those who gift part of deposits to borrowers, will often need to provide proof of wealth, Davidson said.

5) Bank statement jokes
Joke references to friends or family can cause problems, according to brokers.

Lummis said: “A bit of light-hearted banter should not be played out on your bank statements.

“A lender doesn’t want to see a friend paying you back for that meal you had last week, with a crude entry that says ‘payment for drugs’ or ‘sex last night’.”

6) Suggestive card payments
Davidson told of a case where the lender spotted a one-off payment to Mamas & Papas.

The lender then went on to ask if the borrower was pregnant, which could impact their affordability further down the line.

One way for borrowers to avoid bank statements falling foul of lender underwriting is to shift the majority of spending to a credit card in the run-up to submitting an application, which is then paid off in full each month.

Alternatively switching some payments, such as gambling, to cash could also help ease applications through.