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Can Gambling Transactions Affect Mortgage Applications?

MORTGAGES | 20.08.2024

The topic of gambling and mortgages can be a tricky one to navigate and can bring up a whole host of questions for the borrower and the lender. What amount is classed as gambling? Does the frequency of gambling impact eligibility? At what point do I fall into the bad credit mortgage category? These are all questions that need to be answered before entering into a mortgage contract. For some, the prospect of navigating a mortgage with a history of gambling or whilst they still gamble can seem overwhelming but it’s important not to lose hope. There are things you can do to help you when climbing the property ladder.  

What Risks Are Posed to a Lender by a Borrower Who Gambles?

Gambling money with no certainty of the outcome is a risk to any mortgage lender. The biggest question a lender wants answering is, if they lend this money to you, will they get it back? A mortgage is no small sum of money, so lending potentially thousands of pounds to a borrower who may possibly gamble it and lose it, is a very high risk for them to take. That being said, each lender is different, and each will have differing criteria when it comes to borrowing their money. The unpredictable nature of gambling is what poses the risk and those who derive their income from gambling experience periods of fluctuation, no matter how professional they are. The periods of low income from unsuccessful gambling can create concerns in the lender about how they will pay their loan back.  

Can Lenders Decline Mortgage Applications from Gamblers?

In some instances, lenders won’t accept money made from gambling as a viable source of income and will require the borrower to have a more predictable and stable salary in order to approve. That being said, the amount being gambled, and the frequency do come into consideration. If your bank statement shows a pattern of unaffordable, high-risk betting then your choice of lenders will be drastically reduced, as many lenders compare your level of income to your level of gambling.  When you apply for a mortgage, your lender will want to see bank statements from the past 3 months to determine your affordability and some can even ask for them as far back as 12 months. The good news with this is that small flutters of gambling that don’t occur often and don’t affect your finances shouldn’t be a problem.  

What Can I do to Improve my Chances if I Gamble?

If you gamble, or if you have gambled significantly in the past, then asking for advice from a reliable mortgage advisor is helpful. They have the knowledge and experience to listen to your needs and your past and current circumstances to find the best possible mortgage for you. In the meantime, some things you can do personally are:
  • Reduce the amount you gamble and the frequency you do it.
  • Start reducing your debt-to-income ratio if gambling has significantly affected you in the past.
  • Check your credit report for bad credit.
Saving up as large a deposit as possible is also helpful, as this will reduce the risk you pose to lenders. A larger deposit, classed as up to 30%, can improve your choice of lenders and the rates they offer if you have evidence of gambling in your bank statements. However, all lenders are different so to gain an accurate representation of the amount you will need for a deposit, speak to a trusted mortgage advisor in Manchester, like Taylormade.  

What is a Bad Credit Mortgage?

A bad credit mortgage is just like a regular mortgage, except they are likely to have higher interest rates and a much lower limit on the amount you can borrow. Factors like missing credit card payments or applying for credit too often can lead lenders to think you’re a high risk, which could result in higher interest rates and a limit on how much you can borrow. These things can also be the impact of gambling. It is still possible to get a mortgage with bad credit as long as you can show that you are working towards correcting it, i.e. reducing the amount you gamble.  

How Can a Trusted Mortgage Advisor in Manchester Help?

If you are worried about the impact gambling will have on your mortgage application or want help navigating the process of getting a mortgage with bad credit, then your leading mortgage broker in Manchester is here to help.  By ditching the jargon and explaining your options in real terms, we can help identify the best products to meet your personal situation. Contact our expert advisors today at your trusted mortgage broker in Manchester, also operating throughout the UK.
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