If you are in the market for a mortgage, but concerned that any gambling or betting activity you have undertaken previously might affect your mortgage application, you’ll probably want to know how serious the risk is. Read on to understand how gambling could impact your chances of getting a mortgage and seek advice from a specialist mortgage broker today.
Affordability & Risk
First and foremost, a mortgage lender will need to assess the risk a borrower is likely to be based on their financial circumstances. They take into account affordability and ability to meet the monthly mortgage payments and won’t be overly concerned about someone who has the occasional flutter on a horse race, football match, casino games or online games. It is when someone’s gambling activity gets out of hand and starts to affect their ability to meet their monthly outgoings, pay utility bills, meet rent/mortgage payments etc, and affects their credit score or causes them to go into debt, that gambling becomes a cause for concern for those seeking a mortgage.
Some mortgage lenders will look at your spending habits on things like online betting sites and online gambling games to get an idea about something known as your gambling income ratio.
Other mortgage lenders may be stricter than others, but these mortgage providers will all have an idea about the sort of gambling transactions they allow, and ones they deem as too high or too frequent – and they usually base this on your income, too.
While £100 bets might not be considered high risk if you bring home a significant income each month, but if you only earn minimum wage and perhaps don’t work full-time (perhaps bringing in an income less than £1,500), then £100 bets would clearly be seen as much more of a red flag.
Our Customers rate us 4.6 out of 5
Does gambling affect your credit score?
Gambling itself doesn’t directly affect your credit score, rather it’s the outcome of excessive gambling and any resultant financial problems that can impact a credit score that can be an issue for those looking to make a mortgage application.
Gambling can affect your finances and put your household budget under financial strain. If you have a gambling addiction and are always chasing your losses trying to win back what you’ve previously lost, then it’s very easy for your debt to spiral. Resorting to credit cards or loans in this circumstance can all start to impact your credit rating.
You’ll know yourself when gambling is at risk of damaging your credit rating if you’re continuously missing your financial responsibilities and you’re struggling with maintaining financial stability as a result. The more frequent gambling you engage in, and the higher your bets, the more concern you’ll pose to mortgage lenders.
When will gambling affect a mortgage application?
While we have said that gambling activities appearing on your bank statements won’t in themselves impact on a mortgage application, the sums involved could be a cause for concern. If a lender sees multiple large sums regularly coming out of a bank account frequently which are clearly for gambling purposes that puts the account in debt, or perilously close to it each month, there will be a reluctance to lend to that potential borrower.
Mortgage lenders will examine any application carefully and if substantial amounts are invested in betting and other forms of gambling, this will be a red flag. The lender will be concerned how the gambling behaviour could affect the ability to meet the monthly repayments and might consider you high risk.
For so-called professional gamblers, who rely on gambling as a primary source of income, they would unlikely be able to take out a mortgage based on their projected winnings as their income cannot be guaranteed.
Mortgage lenders class excessive gambling as a warning sign, as nowadays it’s clear that gambling can become an addictive behaviour quite easily. Where this happens, it’s often the case that those engaging in excessive gambling will let their responsibilities fall to the wayside in favour of chasing the next win. As such, serious gambling will almost certainly impact your ability to be approved for a mortgage.
What about occasional gambling and mortgage applications?
While lenders will usually want to see your bank statements in order to understand your outgoings and calculate affordability, you may be concerned that signs of outgoings to gambling or betting companies may have a negative impact on a mortgage application. Even if those transactions appear in your payment history regularly, but your finances are still in good shape, it really won’t matter to the lender.
Gambling transactions only ever become a concern when they are excessive, in large amounts, and are clearly impacting upon your finances. Where gambling does affect a mortgage application is where the level of gambling is such that it is clearly causing you financial difficulties.
You’ll likely be struggling to meet bills, have perhaps gone over your credit limit, and may have taken on additional debt or new credit on one or multiple credit cards. All these are signs that your financial well being is not in the best shape, and this will be reflected in your credit history and subsequent score.
It’s likely that your credit score will start to dip, which is the first indicator to mortgage lenders that perhaps you’re a riskier borrower than you initially appeared. This may put some lenders off from offering you a mortgage.
Assessing the impact of gambling on your finances
Gambling, whether betting, online gaming, or something else where you are risking a financial stake, can have significant financial consequences, especially if it gets out of hand. While occasional gambling is usually completely harmless, excessive gambling can be harmful to both your financial and physical health.
Despite what a lot of people may think, gambling has no direct effect on credit scores. It’s the missed payments, low credit balances, and build up of debt resulting from gambling losses that can impact the credit scores of individuals, and this is what will impact on a mortgage application.
Financial difficulties, and debts owed to others that you are struggling with, can lead to county court judgments – or CCJs as they’re also known – which can also impact on your credit rating and lead to facing greater difficulty when seeking a mortgage.
Our Customers rate us 4.6 out of 5
Improving your credit report after gambling problems
If you’ve got into financial difficulty because of gambling debts and have been turned down for a mortgage previously, is there a way back? Yes, previous gambling doesn’t have to put a stop to your home-owning dreams.
At When The Bank Says No, we’re a team of mortgage brokers and mortgage advisers that can help you get back on the path towards a successful mortgage application. We do this by examining your circumstances and giving you active, positive steps towards improving your application and making you appear to be an even more responsible borrower. It starts by improving your credit after gambling issues, and then us putting you in contact with specialist mortgage lenders.
Most mortgage lenders look for those with a good credit history, but even those with previous bad credit can get a mortgage if they can show how their financial situation has changed for the better.
You will have to make the necessary steps to improve your credit reports. Reducing your level of debt, consistently meeting monthly payment deadlines, closing unused credit cards and all unused credit accounts can all be indications that your financial situation is much improved, increasing the chances of the lender being willing to lend to you.
Protect your financial health by avoiding gambling
While a little casual betting isn’t a big deal and shouldn’t affect the chances you have of getting a mortgage, it’s just a fact that many people who gamble happen to be people who already have bad credit. It is therefore advisable not to gamble if you are someone with poor finances in general already.
Getting control of any gambling habit is a great way to show lenders that even if you have poor credit, you are able to turn things around and prove yourself to be a reliable individual capable of borrowing money and meeting your repayment responsibilities.
If you know you are going to be seeking a mortgage in the near future, take care of your credit score and protect your financial situation by not over-spending and avoiding debts, especially those built up through gambling. Stop gambling to avoid any negative marks that could impact on how some lenders might view you. Strict lenders won’t be willing to lend to those with poor credit who are actively gambling, regardless of how much gambling you’re doing.
Applying for a mortgage
When preparing to make a mortgage application you should do everything you can to make you appear as financially sound as possible. The lender will conduct an affordability analysis of your situation so you should try to clear off any debts to show you can be responsible with your finances.
If you have gambling issues, reduce your level of gambling or quit entirely. This will boost your chances of meeting the affordability criteria if your household income is not being stretched each month.
If your bank statements as proof of income can demonstrate that the gambling activity has ceased, or at least been significantly reduced, this will aid your mortgage application.
One of our expert mortgage advisors can advise you about the factors to avoid that could negatively impact your application to give you the best chance to borrow money that you need.
Our Customers rate us 4.6 out of 5
Gambling And Mortgage FAQs
Does gambling look bad on bank statements?
Most lenders will not look unfavourably at someone with gambling transactions on their bank statements when you come to demonstrate your income and levels of affordability for a mortgage.
The lender’s primary concern is about your level of risk and whether you are likely to be able to afford the actual repayments.
Can a professional gambler get a mortgage?
A person who is considered to be a professional gambler, and therefore relying on the proceeds of gambling as their main source of income, is likely to have difficulties getting a mortgage. This is because their income is uncertain and therefore considered too much of a risk.
With a significant deposit you may be able to convince some specialist lenders of your ability to repay, but this will be decided on a case by case basis.
Can you be refused a mortgage if you gamble?
Gambling isn’t reason enough to refuse a mortgage. A person who gambles excessively is unlikely to have a good credit score and would be unlikely to meet the affordability criteria. It is for this reason that they would be likely turned down for a mortgage rather than the gambling itself.
However, if the mortgage applicant is making large transactions frequently and these are clearly for gambling purposes, many lenders would consider that person as ‘unreliable’ when it comes to lending. Poor credit plus an active gambling habit will almost certainly bar mortgage applicants from being approved.
Who can help me get a mortgage if I gamble or have previously gambled?
If you are facing difficulties getting a mortgage, perhaps because gambling has affected your credit score, there is still hope. Mortgage and financial advisors from When The Bank Says No can help you access lenders more willing to lend to people with a less than perfect credit history.
If you’ve made steps to improve your credit score and stopped or reduced your gambling to more manageable levels where it is not overly affecting your affordability for a mortgage, then you have a good chance of being accepted when making a mortgage application. Contact us today and don’t let gambling put an end to your home owning ambitions.