Can gambling affect my mortgage application?
It might come as a surprise to know that when you’re applying for a mortgage, lenders look into outgoings such as gambling. Surely, this isn’t too surprising though? Lenders want to make sure that the borrower they lend to isn’t a risk, and those people who gamble away large portions of their income can come across as quite risky when having their mortgage application reviewed.
This article will cover what goes into applying for a mortgage, what incomings and outgoings are, and how much of a risk gambling can pose to your mortgage application. It will also offer some tips on how to improve your chances of getting a mortgage if you think gambling could affect it.
What is a mortgage application?
When applying for a mortgage, your lender will carry out an ‘affordability assessment’. In this assessment, lenders will review your incomings against your outgoings, and you’ll likely be credit checked.
What are incomings?
Incomings consist of any form of money that you bring in, be that from a monthly or weekly wage, to rental income, or dividend income. Essentially, any money that goes into your bank account from work or other means counts as income.
What are outgoings?
Outgoings are any expenses you pay throughout the month. These can range from mortgage and utility bills, to the occasional trip to the nail salon, or golf course. If money is leaving your bank account, it counts as an outgoing.
This is where lenders will weigh up how much of a risk you are when reviewing your mortgage application. If you spend more than you earn, then the likelihood of you keeping up with your mortgage repayments is less favourable than those whose incomings outweigh their outgoings.
Here is when gambling could become an issue because if it contributes to your outgoings becoming more than your incomings, then it shows lenders that chances of you being able to keep up with monthly repayments is slim.
How much do I have to gamble to be considered a risk?
Okay, now we’re a lot clearer on what a mortgage lender will be looking for when processing your mortgage application, let’s take a look at how gambling could affect your chances of being accepted.
Gambling every now and then isn’t necessarily a massive cause for concern. For example, betting a fiver once a week on your favourite football team wouldn’t interfere with your standard of living. However, spending hundreds of pounds per week on gambling could throw up some red flags.
The main take away here is that if your gambling is considered unsustainable and could impact how much money you have to live off from month to month, then you may be considered a risk high individual to lenders.
What can I do to improve my chances of getting a mortgage?
The most obvious answer to this would be to stop gambling. However, there are a few other ways that could get you into a better position when applying for a mortgage.
- Pay off all existing debts - show lenders that you’re responsible with your money by paying off your debts and demonstrating that you’re financially sound.
- Keep a savings account - by accumulating savings not only will you be able to save for a deposit, you’ll also show lenders that you can be wise with money by putting some away each month.
Having a good credit score - if you have a credit card, make sure you keep on top of paying off all your expenses. Having a good credit history is just another way of highlighting to lenders that you’re responsible with money.
At the end of the day, the odd bet here and there is not going to be detrimental to your mortgage application; it’s all about being responsible with your money.
If you still aren’t sure whether gambling could affect your mortgage application, or if there are any other questions you want answered, then get in touch with a member of our team who can give you the help you need.