Do you want a mortgage but are worried about how the lender will view your gambling spending? If your answer is yes, find everything you need to know about gambling and mortgages in our comprehensive guide.
Fortunately, just because you're a gambler doesn't stop you from getting a mortgage, but it may prompt lenders to dig deeper into your finances than they would with other people.
Even professional gamblers will be subject to higher scrutiny because lenders here will not care how much money you get but will care where it comes from. However, if you are a casual gambler you won’t face many issues. Generally, when evaluating your application, lenders will look at your affordability, eligibility, and credit history.
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The lender evaluates your income and expenses. Essentially, lenders need to make sure that your gambling money comes from your income and that you are aware of your other financial obligations, gamble healthily and follow a sound financial management strategy.
Lenders check bank statements for three to six months to assess affordability. Therefore, limiting your non gamstop gambling activity in this period before applying can make a big difference.
If you prefer to make your deposits using credit cards that will be a red flag to lenders. What a lot of gamblers get into is that they purchase all goods and services using credit cards and do not classify this as a form of borrowing.
Whatever your opinion about using an overdraft, mortgage providers view it as borrowing and it affects your credit rating. However, the good news is that there are a lot of players who don't do this and will take a more flexible approach to their gambling expenses.
What Do Mortgage Lenders Classify As Gambling?
It's easy to think of gambling as leisure, but mortgage providers think about it differently and on a much broader scale than that.
When a lender checks your bank details, any payments to bookmakers, bingo sites or any type of lottery will be considered gambling. However, large or regular payments to online or offline gambling companies of any description will raise questions and prolong the review period.
How Much Money Does the Lender Consider to Be Too Much?
This depends on each lender's risk model. In general, average gamblers will not have problems. However, if gambling affects players' ability to repay their obligations then the lender will be concerned about the potential difficulties you may face during the term of your loan.
Each time you apply, the lender performs a credit check between 3 and 6 months from the date you apply.
For other lenders, repeated applications that are rejected may be considered a negative sign. So, you should take steps to improve your application and determine which lender is best for you.
Which Lenders Should People Who Gamble Avoid?
Many UK lenders do not accept applications that include recurring gambling payments.
If you are a professional gambler, it is best to work with a specialist broker to determine the best lender for you.
For non-professional gamblers, lenders vary in their attitudes to risk.
Some of them don't have a set policy, and others may reject requests altogether.
For example, you may be able to get a nationwide mortgage even if you gamble regularly provided your money is ‘well managed'.
Barclays and NatWest have similar policies.
Other major lenders such as Halifax, HSBC, Santander and Virgin Money have stricter rules.
Can You Pay-off Your Mortgage From My Gambling Winnings?
Although rare, obtaining a steady income from gambling is not impossible.
The number of lenders accepting gambling winnings as income may be small, but their treatment of applications will be similar to their assessment of mortgages for self-employed people. Therefore, if you have great credit and a clean credit history your application may be successful.
How Can Mortgage Applications Be Affected by Gambling?
As previously mentioned, gambling can be a problem for lenders because it indicates high financial risks.
Your transactions at casinos may appear on your bank statements and it is a sign of poor money management.
If gambling is causing financial problems or if it is taking up a significant portion of your income, a lender may see you as unable to handle the debt.
How Can You Improve Your Chances of Getting a Mortgage?
- Stop gambling: It may be best to stop gambling a few months before applying for a mortgage.
- Improve your finances: If you have gone through a period of financial problems. It may be better to wait until you can support your financial stability to be more able to afford the mortgage.
- Credit analysis: You can get your credit report from a credit rating agency and make sure it is error-free.
- Save for the down payment: The bigger the down payment, the better your chances of getting a mortgage.
Get professional advice: Specialist mortgage brokers may be able to direct you to lenders who deal with complex circumstances.