Many people don’t really consider much else when engaging in gambling other than placing their bet and seeing if it’s a winner. Generally speaking, betting and gaming it is looked upon as being a leisure pursuit by most people. Yet for some people, it is important to take note of what sort of betting transactions you have been engaging in recently if you are looking to apply for a loan, such as a mortgage.
If you are wanting to apply for a mortgage, then it will be necessary to show details of any income and any outgoings to your bank account via statements. Anyone making many outgoing payments from their account can be flagged as high risk, and of course, this is not an great situation when applying for a mortgage. But exactly how many betting transactions or how much you spend affect your chances of being successful with a mortgage application?
Gambling Isn’t Going to Stop You Getting a Mortgage
Even though it may seem bad in the first instance if you have outgoing transactions to a gambling company, it’s not something you need to instantly panic about. Despite what you may have overheard about these transactions, it is still possible to obtain a mortgage if you’re a recreational gambler, and even if you’re a professional one, too. It is just good to know how much gambling can have an impact on these applications, and how much is considered to be a problem for mortgage lenders.
It would be true to say that having a history associated with gambling can sometimes have a large impact on you should you decide to apply for a mortgage. Some lenders do have very intense, stringent rules surrounding a person’s eligibility for acquiring a mortgage, and they will instantly be wary of lending to anyone who is identified as a gambler. This is especially true if you have lost a noticeable amount of money and / or have very frequent transactions.
Generally speaking, it will depend upon the mortgage lender in question, but some will overlook your gambling activity based on certain criteria. This includes any or all of the following pointers:
- How high their appetite for risk is
- How often you are participating in gambling
- How much money you are using to engage in gambling activity
- The amount that you win and/or lose on gambling (net positive or negative deposits)
- How recent your gambling transactions are
- The kind of gambling that you are accessing
- Whether you have a bad credit in general
That may seem like a lot of points to factor in to a decision, but there is still good news – it is still very much possible to get a mortgage loan should gambling activity be on your bank statement. As it happens, it’s even possible to declare your gambling winnings on a mortgage application as income with many mortgage lenders. Of course, it is vital to seek out the right type of mortgage lender. A broker can be very helpful in these circumstances, as they can specialise in mortgages for people with more than an average number of gambling transactions. Many new rules have been introduced regarding mortgages over the years, and it is always worth approaching someone who understands the industry for specific help.
How Much Gambling Is Considered Too Much?
What one lender determines as an excessive amount of gambling may be different to another. It generally varies from company to company, depending upon their appetite for risk. Should your gambling transactions be quite frequent, then there are mortgage providers which will consider these during the assessment of your affordability when applying for a mortgage. A decision will then be made based on the amount that you spend on betting, and this will be compared to your income as well as other financial commitments that you have.
Some lenders are quite happy to give low weight to any frequent betting that you engage in if it happens to be well-managed by you and is not beyond your means. Others will assess the applications with recurrent betting and make a decision on them in a sort of case-by-case process. Therefore, additional underwriter scrutiny will be required so as to figure out the full risk of lending to someone who participates in gambling frequently.
There are online calculators that you can make use of to determine whether or not your monthly gambling outgoing will be deemed as too much of a risk for mortgage lenders. These calculators generally require you monthly income and the amount spent on gambling to be inserted into relevant boxes and will then calculate whether you are a low risk, medium risk or high risk to mortgage lenders.
Mortgage lenders in the United Kingdom treat the following activities as forms of gambling:
- Betting at online platforms
- Playing casino games and slot machines, offline and online
- Betting through a bookmaker
- Playing one or more lotteries
- Buying bingo cards
- Purchasing scratchcards
Ultimately gambling frequently is likely to put you into a higher risk bracket, especially if you are withdrawing less than you deposit. It is all about proportions, though. If you are gambling frequently but it represents say 5% of your disposable income then it is likely it will not affect you too much. If you are gambling 50% of your disposable income, or worse money you do not have, then this is likely to have a very negative impact.
Yet how frequent or how much is considered as too much will most often be determined on a case-by-case basis that is proportional to your income and your general lifestyle.
If You Have Already Been Declined Due to Gambling
If you have a history of gambling then it isn’t uncommon for mortgage lenders to decline a loan as a result. This is most often the case if the lender believes your transactions are taking place too frequently, if your losses from gambling are too high or if the amount that you are spending on betting is too high. Under these circumstances, if you have been declined for a mortgage, then there are certain steps to take from that point onwards.
First of all, don’t think that it’s the end of the road, because it isn’t. Undoubtedly, disappointment will set in, and you may be frustrated with the outcome. However, it is important to remember that there are other mortgage lenders with less stringent rules surrounding your gambling activity. In this respect, you may find yourself being approved by an alternative company.
It is good to resist the temptation to re-apply for the mortgage loan straight away. Many people swiftly rush into seeking out alternative options and submit an application elsewhere as soon as the decline from the original application has come through. But if you’re rejected again, then that could have a more serious impact on your credit report. It is absolutely vital to seek out professional advice if you have been declined by a lender already because of your gambling activity.
Try using a broker matching service to link yourself up with an expert in the field. There are specially trained brokers who can work with people who participate in gambling that are looking to obtain a mortgage loan. They know exactly where to turn to, which lenders are the best to apply to and so on, making things much easier for you in the end.
Professional Gamblers
Some people live their lives as professional gamblers, meaning that this serves as their sole or primary source of income. Yet it is important for such people to obtain the services of a broker, because most lenders will see this sort of mortgage application as highly risky. Gambling income is, understandably, highly volatile at times, so the reluctance from lenders to proceed with applications from such people is understandable. It would be common to think that someone who has made a huge amount of money from professionally gambling wouldn’t need that much approval from a lender. But gambling is gambling, whether it’s done professionally or recreationally.
Players with a successful record of gambling activity and who can earn money on a regular basis with a frequently displayed upward trend when it comes to betting are more likely to be labelled as trustworthy by lenders. The income from these players’ gambling activity will be considered for mortgage purposes, as a result.
It is key to note that professional gamblers will have one or more of the following areas speculated on by mortgage lenders upon receiving an application:
- The stability of the income, the applicant’s betting behaviour and habits. A consistent income from gambling needs to be readily displayed over the course of several years.
- The player’s track record. It should be possible for a bettor to display a long-term track record of bringing in income from gambling, which will boost their chances with a lender.
- The type of gambling they partake in. Mortgage lenders will usually look more favourably upon gambling options that require some level of skill, such as poker, blackjack or baccarat, for example. Luck-based gambling games are not looked upon equally.
- The income ratio from gambling. In this respect, the lender looks at a professional’s typical betting stake in relation to the amount of money they possess. This is to ensure that they aren’t spending over what they generally tend to have in their bank account.
How Would A Lender Know You Have Been Gambling
When you apply for a mortgage with a lender, you will need to provide some information regarding your financial status. This requires you to submit bank statements from the past three months (sometimes longer, depending upon the lender), and this will determine your affordability when it comes to a mortgage. In some instances, you may need to provide the last 12 months-worth of statements and proof of income for up to 5 years.
Naturally, any outgoings will be displayed on those statements, including if the bank account or any cards associated with such have been used to partake in gambling. This way, a lender will be able to see what your betting activity has been like over the period of statements you have submitted to them. And indication of overspending on betting activities can be seen by the lender in this instance.
One way that you can minimise your risk is to utilise an alternative payment method at your chosen casino or sportsbook. If you use something like PayPal, Neteller or Paysafecard, as an example, the funds won’t be highlighted as going to a gambling company. Instead, it will show up as a transfer to an e-wallet or a withdrawal in cash, which is used to buy a prepaid card.
This way, if you are applying to get a mortgage loan associated with a specific bank account, your gambling activity will have far less impact. The lender will be less likely to ask for additional information outside of the statements associated with the bank account in question. Still, if you are making lots of transactions to say an eWallet like PayPal they will ask to see those statements too.
Outside of doing that, it is always ideal to speak with a mortgage broker, as they will be able to give you the best advice on applying for a loan. You can inform them of what you need from a lender, and they will direct you in how to acquire that. Also, depending upon your personal circumstances, you may wish to reduce your debt to income ratio, reduce the amount and the frequent by which you partake in gambling, and check your credit report for any bad credit.
If you are someone who had a gambling problem in the past and are recovered or recovering those past transactions could still count against you depending on how long ago it was. It is possible for you to demonstrate your recovery progress to lenders that could help in reducing your risk profile, again a broker can help with this.