Mortgage Declined Due To Gambling
Being declined a mortgage is more than disheartening.
It’s a major setback because it will hamper all other applications you make shortly after being declined.
Why mortgage applications are declined and what to do next If your mortgage application gets declined, there are a number of things you can do to improve your chances of getting approved next time. Don’t rush off to another lender as each application could show up on your credit file. Gambling is deemed more of a risk than being self-employed especially if there is no trace of regular savings but a build-up of debt instead. You need to be aware that if you’re a professional gambler, this activity is seen as a risk and could result in your mortgage application being declined. After requesting more information, the lender eventually declined the case. Davidson said the client had effectively been punished for their choice of vice. Rachel Lummis from Xpress mortgages agreed gambling transactions cause problems.
For a large loan product, it’s advisable that only two applications be made in the same year. With such a low application ratio, it’s definitely worth your while to take your time in choosing a lender and taking steps to ensure the application stands a good chance before you submit it.
4 Considerations for a Clean Mortgage Application
- The nationwide are shit, my sister was declined by them after trying to port her mortgage. We were also declined, even though we wanted to borrow £100k less! The reason they refused us is because of 2 large payments out of our account putting us nearly in our overdraft.
- If we have an up to date mobile number for you, we will send you an SMS when any transaction using your HSBC UK debit card is declined due to a gambling restriction you have enabled. To update your mobile number with us please log on to online banking, or contact us on 03457 404 404.
1 – No gambling transactions on your bank statement
Banks tend to check the last 6 months of your bank statement, if not going back a year. If there are large amounts or multiple smaller amounts going to online gambling sites, it might put your application under more scrutiny.
Gambling is considered risky, but only when it’s considered problem gambling. One user on the GamCare forum board writes about how the bank manager called him on the phone after noticing transactions to a gaming website. That goes to show you that there are many variables considered during the application process. Even with a stellar credit rating, the transactions on your bank statements could call for more scrutiny being put on your financials.
If you feel your bets are getting worrisome, get advice.
“The Gordon Moody Association, which treats the most serious addicts, estimates that they “will have severely affected the lives of at least 15 others in order to support their gambling”.
~ Neasa MacErlean: Independent.co.uk
For those affected by others, GamCare has a support and advice page for those affected by problem gambling.
One of the first problem gambling reports to be published by the Gambling Commission polled 4,000 people in Wales, which identified 1.1% of respondents as problem gamblers with a further 3.8% of all respondents being identified as low to moderate risk of problem gambling.
For Britain as a whole, The Independent reports that up to 3.5M people across the UK are in the at-risk category of problem gambling.
2 – Lenders are Scared of the Self-Employed
A few years back, the Self-Employed could easily get a mortgage through self-certification. These were no proof required loans, which led to this type of loan being dubbed the liar’s loan because it was easily manipulated. Now they’re banned.
Most lenders are going to scrutinise a mortgage application when it’s from someone who is self-employed. It makes them nervous because there’s income fluctuation. Lenders are extremely insecure and the self-employed scare them.
Your challenge to get an approval on a mortgage is to convince them that you’re a safe lender.
A couple of things that can help lenders feel more comfortable approving a Self-Employed mortgage:
Don’t do your accounts yourself
Have an accountant, preferably a Chartered Accountant, as that gives proof that your accounts are above board, and documented by a professional who stands behind your figures. It’s no longer based on your version of your accounts, which can be manipulated in many a way.
Request a copy of Form SA302 from HMRC
This form is a back up to support your claims made about your accounts, which preferably should be done by an accountant, but if you’re comfortable taking care of your own self-employed tax returns, you’ll definitely need this form. It’s a verification method in place to let lenders know that what you state is your income, is the same as what’s declared to HMRC.
Buckley’s Chartered Accountants have explanatory guidance on what’s needed and how to access the form using your HMRC online credentials.
3 – Review your spending habits
Chances are you aren’t looking too closely at your bank statements every month. That’s something you should be doing before applying for a mortgage because lenders will review your spending habits.
When asked for copies of your recent bank statements, this is why and not to verify your income. It’s to review your spending. They want to see you can afford the payments based on your income and not supported by Mum and Dad’s FPI payments to keep you afloat.
Look over your recent bank statements and see where your money is going. If (or when) you notice you could be developing better spending habits, refer to James Coney’s advice on This Is Money about spring cleaning your finances.
4 – Setup Your Accounts to Never Miss a Payment
People forget and that’s a real problem when it’s a payment to be made from your Current Account. That’s bad and is reflected by a lenders decision to refuse an application due to payment defaults, especially if it happens regularly.
If you’ve a tendency to forget how much is needed and when, there’s a fool proof way to make sure you never miss a payment again. What you need to do is set up a new Savings Account with the same bank you hold your Current Account with, and then have the bank link the two accounts. That way when your Current Account is short of funds, the shortfall that would result in the transaction failing and the payment missed, the amount your short of will be taken from your linked savings account ensuring the payment is made on time.
If you work with PayPal, you’ll know that if you don’t have the money in your PayPal balance, payments can be still be made automatically using your bank account as that’s your back-up funding source.
You can have your bank do the same with a Current and Savings account. Setup a backup funding source. That’s only useful if there are enough funds in it though so it would be best to work out how much your total Direct Debits and Standing Orders are, and then keep that amount in your Savings Account. If it is dipped into, top it up by the amount that was used. Then you’ll always have at least enough to pay a month’s worth of Direct Debits and any Standing Orders you have.
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It probably won’t surprise you that gambling and mortgages generally don’t mix well. When a bank lends you money for a mortgage loan, it means they trust you will be able to pay it back. However, if they see that you’re an active gambler, then this may go against your application.
However, it is important to note that there is a difference between those who gamble large amounts of money on a regular basis (including those who are professional gamblers), compared to those who put a small bet on every now and then.
How will gambling affect my mortgage application?
If you’re a professional gambler and you want to use your winnings as evidence that you can afford to take out a mortgage, the banks see this as being a lot riskier than someone who has a job and gambles occasionally, so you may come across a few challenges. However, being a professional gambler and getting a mortgage isn’t impossible. Some lenders who are willing to lend you the money might alleviate this risk by increasing the interest rate and only lending a small amount of money.
You may argue that professional gambling is no greater risk than being self-employed…but lenders see it differently. Gambling is deemed more of a risk than being self-employed especially if there is no trace of regular savings but a build-up of debt instead.
Mortgage Declined Due To Gambling Losses
You need to be aware that if you’re a professional gambler, this activity is seen as a risk and could result in your mortgage application being declined.
When won’t gambling affect a mortgage application?
When lenders conduct their affordability checks, they will look at your bank statements from the previous 3-6 months. This means that any gambling during this period will be seen by your potential lender. The primary concern of the lender is that you aren’t getting yourself into debt by funding your gambling. If you’re gambling using your own money and you’re not in any debt, then this is unlikely to have an impact on your mortgage application.
If you only put the odd bet on here and there, you won’t need to worry about gambling affecting your mortgage application. However, it is important to be mindful, if your finances begin due to betting, then this may begin to affect things.
How to get mortgage approved
If you do gamble and you’re worried whether you can get a mortgage, you could try the following things to help improve your situation and get yourself mortgage ready:
- Clear your debts - Clearing off any debt shows that you’re responsible when it comes to your finances.
- Make regular savings- If you can evidence that you have a savings account that you regularly pay into, the lender will see you as a low-risk borrower.
- Good credit history- Work on your credit score if required. Having a good credit history improves your chances of getting a mortgage.
- Stop gambling- The most obvious, but this can only happen if you want to stop.
Get the right mortgage advice
Booking an appointment with a mortgage broker can help you get the advice you need to get yourself onto the property ladder. Your broker will be able to address any queries you may have about your spending habits.
At Mortgage Advice Bureau, we deal with people from all walks of life and we do not judge anyone's personal circumstances - we are simply here to help.
Get help for your gambling addiction
If you’ve previously been refused a mortgage due to gambling, then it may be the right time to seek advice. Visit the GambleAware website for help with a gambling addiction https://about.gambleaware.org/.
For further information call: 0800 652 6649
Email: scotland@mab.org.uk or visit: mortgageadvicebureau.com/scotland
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
Mortgage Declined Due To Gambling Winnings
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.