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Does Gambling affect my mortgage application?

Does gambling affect your mortgage application?

 Applying for a mortgage is a process that will involve heavy scrutiny of your financial history and current income and expenditure. A house mortgage is probably the biggest loan you will ever take out, so banks will do the necessary analysis to check whether they trust you to repay the loan.

 

One question that often arises is whether gambling affects mortgage applications and the simple answer is – yes it does. If a bank is weighing up whether they think you will be able to repay the mortgage loan, they will want to know if there are any concerns that could potentially stop you from doing so.

 

Evidence of gambling, even a small transaction could impact your ability to get your mortgage approved. Whilst gambling small amounts every now and then when you are not taking out credit to pay for it should not be enough to cause your application to be declined. However, if there are other financial issues that get flagged, or you are gambling large sums of money then this will definitely bring your gambling to the attention of underwriters assessing whether to approve your application.

     

    Why does gambling affect my mortgage application?

     Mortgage companies want to be as sure as they possibly can be that you will have the ability to pay the loan back over the agreed period of time. If you are prone to gambling large sums, especially if you are using credit, i.e. using credit cards, living within your overdraft etc. then this will be a red flag for lenders as a potential indicator of you not being able to meet future payments.

     

    Regulations brought about in 2014 and 2017 changed the way that affordability is assessed and looking at bank transactions within your statements is a part of that. If your account statements reveal that you have been regularly placing bets with betting companies or going to casinos then this will be highlighted as a risk.

     

    Tips to increase your chances of mortgage approval

     Before you apply for a mortgage, be aware that your last 3-6 months of bank transactions will be analysed and that your spending behaviour in that period should be as favourable as you can get it to. In other words, try not to use your overdraft and try to avoid making any gambling transactions. If you fancy the odd flutter, it is better to use cash so that there are no transactions showing on your bank statements.

     

    However, the best approach is to completely stop gambling. Not only will it help your bank statement assessment, it will also help you to save more money for your house deposit. If you have any debt then the more you can clear, the better. Lenders will look at your debt-to-income ratio to see how much you can realistically afford to be paying off with all other expenditures taken in to account.

     

    Checking your credit history is a really good idea, whether you have any concerns about your financial history or not, there may be outstanding issues that you were not aware of that you will benefit from clearing. It may be that there is some negative credit history that will soon fall out of the range that counts towards your credit checks. For example, if you had late payments seven years ago, they are removed from your credit file after the seven years, so you would be better to wait until any negative issues have cleared from your account before applying for a mortgage.

     

    One of the most important factors to stop gambling affecting your mortgage application is to ensure that you are not borrowing money to then gamble with it. That will show lenders that you are taking on debt in order to gamble and that will flag you as a big risk to them.

     

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    The increasing focus on spending habits and gambling

     Gambling is becoming a growing concern with the ease of online betting and the regular television adverts and promotions that tempt people into gambling. Getting a mortgage approved is much more difficult now than years ago when 100% mortgages were commonplace. Lenders have become stricter with their lending criteria and their analysis into spending is much more detailed.

    The best way to ensure that your mortgage application isn’t refused due to gambling is obviously to not gamble at all. Gambling is a problem that can soon escalate, landing you in financial trouble that could take years to resolve, leaving you unable to get a mortgage application approved.

     

    If you are looking for some advice on whether you will be able to get a mortgage approved and if so, the best type of mortgage to apply for in your circumstances then speaking to a mortgage broker will help you to decide your next course of action. Having mortgage applications declined will add more searches onto your credit file, so you are better to get an idea of where you stand financially before you apply for one.

     

    Getting help for gambling addiction

     If gambling could prevent you from getting a mortgage application, then it is definitely time to get help. The key question you should ask yourself is whether you bet more than you can afford to lose. Also, do you chase losses or feel you need to keep increasing the amounts that you bet in order to get the same feeling of excitement? If the answer to any of those is yes, then you should be seeking help to deal with gambling addiction. As well as putting you into financial difficulties, gambling problems can ruin relationships and have a big impact on your mental health.

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