Money Team, by Jess Sharp
Betting a fifth on a soccer team to win over the weekend sounds like a bit of harmless fun, but it can actually ruin your chances of getting a mortgage.
Lenders have always been cautious when it comes to approving mortgages, but some brokers are finding that even the odd gambling transaction is now considered a red flag.
Borrowers are typically judged on a variety of factors when applying for a mortgage, including income, age, credit availability, and payment history.
The exact requirements for getting approved for a mortgage may vary from lender to lender.
Joe Childes, a mortgage advisor at Right Choice Mortgages, told the Money Team that banks have recently made claims based on gambling transactions on customers’ bank statements, even if it’s just a weird flutter. He said he saw people refusing to do so.
“Lenders seem to have different tolerances for gambling transactions,” he said.
“We have seen cases where customers are rejected if they have a separate account to place their bets, even if they are betting on football over the weekend.
“Gambling deals can be questioned by underwriters, and in some cases we have seen them suddenly decline without any grounds for appeal.”
On LinkedIn, he cited one case in which a client submitted a joint application, had no background credit, was seeking a mortgage with a loan-to-value ratio of less than 50%, and was turned down twice. I did.
They had never had an overdraft and had £5,000 in their current account.
He said: “These are only for soccer betting and have only been mentioned in one of the last three cases. The affordability of the transaction levels we are seeing is not a concern.”
He questioned whether banks would make the same decision for people who drink or smoke excessively, or who go to local bookmakers to place bets with cash.
“If a customer can afford to spend, is it right to tell them how to spend their hard-earned money?” he asked.
What kind of bets can cause problems?
Mr Childes said that no matter how much money a customer could afford to put down, it was likely “habitual spending” on gambling that would cause the most concern for lenders.
“For example, for some customers, betting on soccer is a hobby and the amount they spend is not excessive compared to their income,” he said.
“However, we have seen applications from these customers denied even when the customer is not under financial pressure and is able to maintain spending levels.”
People should be aware that when applying for a mortgage, underwriters will scrutinize bank statements and are likely to suspect gambling transactions.
“If the number of transactions confirmed through your account is deemed excessive, your mortgage application may be denied,” Mr Childes said.
He added that lenders have not been able to clarify what their “tolerance level” is for gambling, with many saying it will be assessed on a case-by-case basis.
Gambling policies of major financial companies
We asked all major lenders to explain their gambling policies to their money teams. Their answers are:
Santander
The large bank does not have any special gambling-related policies for mortgage customers.
Instead, we perform an affordability assessment when considering your new mortgage application.
This includes evaluating the customer’s bank statements to see if the monthly repayments are affordable considering all of the customer’s expenses.
barclays
Barclays said there were no set rules regarding gambling and that it “ensures all mortgages are affordable before being offered, including testing with higher interest rates.”
Nationwide
Nationwide said that as a “responsible lender” it aims to ensure customers can make their mortgage payments now and in the future.
The company said each application will be evaluated on a case-by-case basis and a variety of factors will be considered to determine the amount available to borrow.
We also contacted HSBC, NatWest and Lloyds but received no response.
What should I do?
If you think your gambling habits are causing your problems, there are steps you can take.
Matt Zarb-Cousin, co-founder of anti-gambling software Gamban, says that people chase losses, get so caught up in gambling that they think about their next bet, or lose interest in other activities. If so, he said, you need to start reevaluating your actions.
“These actions often lead to very high loss-seeking gambling sessions and can cause significant financial damage lasting weeks or even months,” he said.
“By catching the signs and stopping it before it gets to that stage, you can prevent it from happening in the first place.”
If you want to stop gambling online, talkbanstop.com offers free tools and support.
Zarb-Cousin said banks also offer the option of blocking gambling transactions, which creates another layer of friction to help prevent it from happening again.
He said: “Gambling transactions can affect mortgage applications, but the biggest concern for lenders is to avoid borrowing money to fund gambling.”
He noted that lenders often look at bank statements from the past three to six months, so even quitting for that amount of time before applying can put you in a better position.
