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.
Last Edited: 05/01/2023