Within your mortgage journey, you will need to show the lender your bank statements for them to find out certain things regarding your financial management. The reason lenders pay close attention to this is that your bank statements show them how well you conduct your finances and conclude whether you are a responsible borrower or not.
A common question we do come across when speaking to mortgage applicants is if gambling transitions look bad on their bank statements.
You may be one to throw your money on the Grand National once a year or you may be a regular user of internet betting websites. Either way, properly licensed gambling is not illegal. This is obviously evident in the many advertisements you may see about gambling these days.
Many people gamble as a hobby or pastime, however, it’s also key to keep in mind that the general ethos surrounding gambling is to gamble responsibly. This is something you need to do before applying for a mortgage.
Even though it’s not up to a mortgage lender to tell you how to spend your money or that you should gamble responsibly, it is their job to lend responsibly and follow the mortgage regulations.
From a lender’s perspective, they need to be careful who they lend to and prove to regulators that they are responsible, they do expect applicants to have a similar attitude from an applicant and their finances.
Furthermore, if you were to lend money to someone, you would want to know that person to who you are lending is a reliable person who will pay you back.
As mentioned at the beginning of the article, a mortgage lender cannot stop you from gambling as it is a legal activity. If you do gamble, it doesn’t automatically mean you are going to get declined, there is a chance you can get a mortgage!
It can be difficult for applicants with gambling habits but a mortgage lender can decide whether your transactions are reasonable and responsible or not.
One way they could determine this is by working out the number of times these transactions happen as well as comparing how big the transaction is and the applicant’s income. From this, they will look into how much of an effect this has on their account balance.
In the case where you only make smaller transactions on an occasional basis, with little impact on your credit score, it’s likely that a mortgage lender won’t have an issue with them. On the other hand, bigger, recurring transactions are likely to be more irresponsible which could result in your application being rejected.
The overall purpose of submitting your bank statements to a mortgage lender is for them to look at how well you manage your finances and to see if you are a reliable borrower.
Keep in mind that mortgage lenders are financial institutions that usually sell current accounts, overdraft options, credit cards, personal loans and more. Therefore they will be significant in your mortgage application.
As a mortgage applicant, you need to show how you utilise these facilities. For instance, having an overdraft and using it now and again isn’t an issue constantly going over it could go against you.
Furthermore, they will look out for any missed payments on any personal loans you have and any undisclosed loans you have. An applicant could be managing their payments well but have not mentioned a regular outgoing which won’t look good.
Lastly, some mortgage lenders look at the length of time you are overdrawn over the month. Are you the type who goes to credit on payday and finds it difficult to get through the month? Would a mortgage make you struggle even more?
Your main job is to be sensible and plan ahead if you can. Usually, a mortgage lender would like to see the last 3 months’ bank statements which show your income and regular outgoings.
With this in mind, you need to be careful before you look to apply for a mortgage in the future. Step away from gambling for a while and get your bank account looking good for the lender.
As a Mortgage Broker in Halifax, our team can provide a helping hand throughout the mortgage process and you may find that there are mortgage lenders willing to take fewer bank statements.
It is key that you are sensible before applying for a mortgage as even lenders who are willing to accept less at first, still have a right to request more if necessary.
Please make sure you gamble responsibly! It can have an impact on your financial and mental state.
As a first time buyer in Halifax, you may have little to no knowledge about mortgages which is why we strongly recommend that you get in touch with an expert mortgage advisor.
Through our experience, we have built a brilliant reputation on helping a plethora of customers from varying circumstances. Therefore, it’s ver likely we have encountered your situation before.
Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.
Whilst it is widely accepted that there is a national housing shortage, the Government has launched several schemes over the years. These have been under the “Help to Buy” banner, designed to get people onto the property ladder.
Unfortunately calling all the schemes Help to Buy has caused confusion amongst consumers! Here’s my take on what’s out there right now.
If you’re in the armed forces, you can borrow up to 50% of your salary, up to a maximum of £25,000 interest-free towards a new home.
There are lots of options available to you. It’s a good idea to speak to your Accountant and also speak to a mortgage broker for advice.
Yes and no, the Help to Buy Equity Loan is for new build properties only. The Forces Help to Buy can be on new or old.
There may be options available to you even if you have a poor credit score. Mortgage lenders are becoming increasingly competitive on criteria and many challenger banks are entering the market. Again, please seek mortgage advice from a local expert!
A minimum of 5% as a rule.
Yes, family members and sometimes friends can gift (not a loan). This is a popular way for First Time Buyers to get on the property ladder. In a recent government survey, 27% of such buyers relied on family and friends to help with a deposit.
Yes, with the Help to Buy Equity Scheme the Government loan is interest-free for 5 years. After this, you’ll pay fees. Hopefully, the property will have increased in value and you can potentially remortgage the property at any time. This likely would be to raise funds to increase your share. Remember, the government will also receive their share of any profit made.
The Help to Buy Equity Loan is only available for First Time Buyers, however, the Forces Help to Buy can be accessed by both First Time Buyers and Home Movers.
The first stage would be to have a free mortgage consultation. This is to work out your maximum borrowing and also to get a mortgage agreement in principle certificate. This puts you in a strong position to make an offer. Once you have this in place you’ll be a “qualified buyer”, the next step is to go and view houses!
For more information and further terms and conditions about any of the above schemes please refer to the ownyourhome.gov.uk website.