If you’re planning on making a mortgage application, you need to understand every factor that plays into your likelihood of being approved by a lender.
You might be surprised to learn that gambling can actually have a big impact on your application, because lenders will assess how much of a risk you are when it comes to making regular payments and managing your finances.
However, this doesn’t always mean that you can’t get a mortgage at all, even if you are a regular gambler.
What do mortgage lenders class as gambling?
Any gambling-based transactions which appear on your bank statement will be considered and treated by lenders as gambling, but that doesn’t necessarily mean all forms of transactions will impact your application significantly.
Lenders consider the following as forms of gambling:
- Online poker
- Online sports betting
- Lotteries/scratchcards
- Bingo
- Casino games
- Slot machines
However, mortgage lenders won’t simply see gambling transactions and write you off, rather they’ll look for certain patterns which might raise red flags.
For example, repeated transactions with gambling sites, regardless of size, might be flagged, as well as any transactions which are large in relation to your income/savings.
On top of this, using borrowed/loaned money to fund this gambling is usually seen as the highest-risk factor by lenders.
Can lenders see whether you have been gambling?
Generally, lenders can see if you’ve been gambling. Most mortgage lenders will ask to see your recent bank statements (usually 3-6 months), and transactions with gambling sites, bookmakers, or casinos will be flagged immediately.
So, if you’ve made any such transactions within the timeframe asked for by the lender, they will be able to see your gambling activities.
Why might mortgage lenders take issue with gambling transactions?
Mortgage lenders might take issue with gambling transactions because they believe it might make you a higher risk individual to lend money to. If you regularly gamble with your money, or have a history of making large bets/gambling large amounts of money, a lender can’t be sure that you won’t continue to do this and risk losing your money (which may affect your ability to pay off your debts).
Think of it this way; would you be eager to lend money to somebody who might not reliably be able to pay it back?
When will gambling affect a mortgage application?
Gambling will typically only affect a mortgage application in the following circumstances:
- High frequency gambling – If your gambling is regular (such as daily or multiple times a week), lenders might question how controlled and responsible your habits are.
- High proportion of income gambling – If the money you’re spending on a weekly/monthly basis amounts to a high proportion of your overall income, lenders might deem this to be an unaffordable habit.
- Gambling with borrowed money – Gambling with money from loans, credit cards, or overdrafts is generally a big red flag.
- Impact on financial stability/management – Even if your gambling isn’t particularly regular or with large sums of money, if it appears to be having an affect on your ability to manage your finances, it may affect a mortgage application. For example, if you’ve missed a scheduled payment, or a direct debit has bounced as a result of lack of funds through gambling.
Remember, lenders are simply assessing how reliable you seem to be when it comes to your mortgage payments. Gambling small and responsible amounts of money on sports events, or buying a lottery ticket each week most likely won’t be harmful to your application.
Does gambling affect your credit score?
Gambling can affect your credit score, but only indirectly. The act of gambling itself is not reported to credit agencies, but if your gambling habits negatively affect your overall financial habits, then this will lead to a decrease in your credit rating.
Missed payments, debts, cash advances and casino lines of credit can all damage your credit rating, so ensure your gambling habits are responsible and financially viable to pass a mortgage credit check.
You can still get a mortgage with a bad credit score.
Applying for a mortgage when you gamble, or have previously
If you gamble, or have a history of gambling, it’s strongly advised that you try to reduce your gambling spend entirely, or significantly, before making an application. This is because lenders may see you as financially unstable, and be less inclined to lend you money.
If you have previously had a gambling issue, but you’ve managed to clear your debts and improve your credit rating, you shouldn’t run into any problems when applying for a mortgage. Most lenders will only look for the past 3-6 months of finances, so may not even know of any previous gambling issues.
What happens if you’ve been refused a mortgage due to gambling/betting
If you’ve been refused a mortgage due to gambling or betting, it’s not the end of the road. First, it’s important to educate yourself regarding how and why the lender may have rejected your application, and hopefully this blog post has helped with that understanding.
Next, it’s worth seeking advice from a mortgage advisor, such as Barlow Irvin, for expert insight regarding your options, and how you can increase your chances of success in future applications.