When a mortgage lender asks to take a look at your bank statement, they’ll be looking for a variety of things.
One of the main reasons for doing this, is to confirm whether or not you are a responsible borrower, who can handle their finances and maintain monthly mortgage repayments.
We regularly find ourselves being asked by mortgage applicants that we speak to; “Do gambling transactions look bad on my bank statements?”
From splashing some cash on the Grand National once a year, to being a regular customer on internet betting websites, it is clear that properly licensed gambling is not an illegal practice. You’ll find plenty of adverts on the telly about gambling these days.
Gambling is seen by many as simply a hobby or pastime, though it’s also important to remember the tagline on all of those adverts, which is to please gamble responsibly. This is key, ahead of applying for a mortgage.
Whilst it’s not really up to a mortgage lender to tell you how to spend your money or that you should gamble responsibly, they themselves do have a duty to lend responsibly and adhere to mortgage regulation.
If a mortgage lender needs to be careful in who they lend to and prove to the regulators that they are responsible, it’s not too much of an ask to expect the same approach regarding an applicant and their finances.
Think about it from your own perspective; If you were going to lend money to someone, you would want to know that the person you are lending to is a trustworthy individual and is “good for it”, that they can pay you back.
As outlined at the start of this article, gambling is not illegal and therefore a mortgage lender cannot stop you from doing so. It also doesn’t automatically guarantee that you are going to be declined; It can be possible to get a mortgage!
Where it can get tricky for applicants with gambling habits, is that it is up to a mortgage lender to decide whether or not your transactions are both reasonable and responsible.
With this in mind, they will be taking a look at how frequent these transactions occur, how big these transactions are compared to the applicants income, and the impact they are having on your account balance.
If you are only making smaller transactions on an infrequent basis, with minimal impact to your credit score, then a mortgage lender likely won’t be bothered by them. On the contrary, larger, more frequent transactions will likely be deemed irresponsible and you could be declined.
As we have looked at, a mortgage lender will be looking to see how you manage your finances in order to determine whether or not you can be a reliable borrower.
It is important to remember that mortgage lenders are financial institutions who tend to sell current accounts, overdraft options, credit cards, personal loans and more, so things like this will also play a part in your mortgage application.
The key for a mortgage applicant is how well you can manage these facilities. For example, having an overdraft facility and occasionally using it, isn’t necessarily bad, though going over repeatedly likely will go against you.
They will also look for any possible missed payments on any personal loans you have, as well as any undisclosed loans you have. You might be keeping up your payments, but failing to mention a regular outgoing won’t look great.
Lastly, a mortgage lender may well consider how much of the month is spent overdrawn. Do you go into credit immediately on payday and spend the rest of the month struggling? How sustainable is a mortgage for you?
The simple answer to this is just to be sensible and plan ahead if you can. Generally a mortgage lender wants to see the last 3 months bank statements, to show your income and regular outgoings.
As such, if you are looking to apply for a mortgage at some point in the future, you would do well to be careful in advance. Take a break from gambling and showcase your bank account in the best light.
Your mortgage broker will be able to help you during your mortgage process, as there may be mortgage lenders who are willing to take fewer bank statements.
That being said, even the lenders who initially are willing to accept less, do still reserve the right to request more if they need to, so it’s still always important to be as careful as possible leading up to a mortgage application.
Always make sure you gamble responsibly! The warning is there for both your financial and mental well-being.
If you are new to the mortgage world and are applying for a first time buyer mortgage, it is always recommended that you speak with a specialist mortgage advisor.
We are experienced in helping customers to obtain mortgages with bad credit, so even if your credit history doesn’t look great, there may still be options for you!