In this brief blog, we will consider what happens if you get declined for a mortgage becaused of gambling.
Most of us love to gamble, we love the bingo, the poker, the roullette and all the exceitement that gambling brings but when looking to get a mortgage you may be cncerned about getting declined for a mortgage due to gambling. If you are a professional gambler then your circumstances may be different and a mortgage lender may consider it on a case by case basis.
Does gambling affect your mortgage application?
Yes, gambling can affect your mortgage applicaton as some mortgage lenders will look at your bank statements in order to find any transactions that they may consider risky. Gambling can affect your mortgage application if a mortgage lenders discovers gambling transactions on your bank statements. In some cases this could mean that your mortgage application is declined.
Whether gambling will affect your mortgage application will depend heavily on your personal circumstances.
As long as you arent borrowing money to gamble you may be able to get a mortgage. If the mortgage lender finds that you are borrowing to fund your gambling then it is very likely they will decline your mortgage. This could be the case even if you are using your overdraft to fund your gambling.
If gambling is a big part of your monthly expenses then you may find that many mortgage lenders will not offer you a mortgage as they ma consider you as someone who is addicted to gambling and someone who may risk paying for your mortgage in order to gamble.
Can your mortgage be declined because of Gambling?
Yes, your mortgage can be declined because of gambling as some mortgage lenders look at gambling as a very risky finacial behaviour. This is because people who gamble may develop an addiction and forgo their other monthly responsibilities. This means they could possibly miss their monthly mortgage repayments
Does gambling affect your credit score?
Gambling doesnt actually affect your credit score because credit bureaus dont collect gambling data and include this on your credit file.
How to get a mortgage if you are a gambler?
If you are a gambler there are a few things you can do ti improve your chances of getting a mortgage. These are not financial advice and you may ant to seek independent financial advise from a mortgage broker.
Increase your mortgage deposit
By increasing your mortgage deposit you will reduce the mortgage lenders loan to value and hence reduce the amount of risk a mortgage lender may have when lending to you.
You can increase your mortgage deposit by using a first-time buyer or home mover government scheme.
Some of these schemes include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy– allows you to buy your home at a discount price.
- Preserved right to buy– same as above.
- Right to acquire– similar to the above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.
Get a guarantor mortgage
A guarantor mortgage will reduce the risk of the mortgage to the mortgage lender as themortgage as guaranteed by some collateral which the mortgage lender may be able to repossess if you default on the mortgage.
Use a different account
Putting your gambling on an account which is made simply for you to gamble may keep this away from the eyes f the mortgage lender and avoid you being declined for a mortgage because of gambling. The issue with this is that most bank accounts you have may be visible on your credit profile and this means that most mortgage lenders will ask you to provide the bank statements for that account.
An alternative to doing this will be too simply pay for your Gambling by transferring money through your PayPal account. You should also note that if there are too many PayPal transactions on your bank statement then the mortgage lender may still request to see your PayPal activity statement to determine where all these transactions are going towards and if they find out that you are gambling then they may decline your mortgage.
Another simple solution to avoid having a mortgage declined because of gambling is to simply stop gambling. If you stop gambling you may also have enough money to put towards your mortgage deposit rather than risk gambling. This is especially true if you are not a regular winner when gambling.
If you are a gambler then mortgage lender may still be willing to lend to you if you have a high credit score. You should look to build credit if you want to avoid your mortgage being declined due to gambling.
You can build credit by:
Getting on the electoral roll
Getting a credit builder loan or card
Avoid missing repayments on your credit accounts
Keeping your credit accounts open as long as possible.
Reduce your debt to income
If you reduce your debt to income then you may find that many more mortgage lenders are ready to offer you a mortgage even if you are a gambler. Your debt to income ratio can be reduced by payin off more off your debts.
Can you use gambling income as a mortgage deposit?
Yes, you may be able to use gambling income as your mortgage deposit but you may find that many mortgage lenders will find this as a more risky option in contrast to a borrower who has a mortgage deposit which was gifted or generated from their employment.
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.