When lenders ask for your bank statements, you can expect them to look for a variety of things. In any case, their main objective is to assess whether you can balance money responsibly and keep up to date with your monthly mortgage payments. One question we find ourselves being asked by applicants often: “Do gambling transactions look bad on my bank statements”.
Many people can see gambling as a mainstream hobby. However, don’t forget that even gambling advertisers urge customers to play responsibly, and this is something you should absolutely bear in mind when applying for a mortgage.
Whilst it is not up to the lender to tell you how you should live your life, how you should spend your money, or to even decide the ethical rights and wrongs of gambling, they do have a duty to lend responsibly to their customers.
If lenders need to prove to the regulators that they are wisely making their lending decisions, it isn’t entirely unreasonable of them to wish that those who they lend to, to adopt a similar approach when it comes to managing their finances.
Look at it from the lenders perspective; If you were lending your own money, would you lend it to the applicant who gambles or the one who does not?
There’s no law against gambling and no harm in having the odd gambling transaction on your bank statements. These being present doesn’t automatically mean you will find yourself declined for a mortgage.
That being said, the lender will decide on whether these transactions are reasonable and responsible. Additionally, they will mainly look at how often these transactions take place, how large these transactions are, and the impact on the customer’s account balance.
If these transactions are small amounts and don’t happen often, making no significant impact on a regular credit bank balance, then they are not likely to flag up in the eyes of the lender. On the other hand, if you make bets frequently or you get overdrawn continuously, the lender will most likely see that as being irresponsible and decline your application.
From our experience Lenders are looking at your bank statements to gain an understanding of how you manage your finances and to give them either the confidence that you are financially capable of paying back a mortgage, or the evidence that you aren’t.
Having an overdraft facility and occasionally using it, whilst not necessarily a bad thing, can cause trouble if you are regularly exceeding the overdraft limit. Lenders will look for excess overdraft fees or returned direct debits, as this would demonstrate that you are not so good with your finances.
Some other factors to be mindful of include credit transactions from payday loan companies and undisclosed loan repayments. If there appear to be regular loan payments that you failed to mention at the point of application, this could be a problem.
Generally speaking, a bank would ask for up to three months of your most recent bank statements, which will show your monthly income and all your regular bill payments. If you know you’re likely to want to apply for a mortgage in the future at all, try to make sure that you are in the best possible position financially.
Stop gambling for a short while and work on presenting your bank account in the best way you can. Remember, if you do decide to gamble at all leading up to and during your process, please gamble responsibly!
If you are a First-Time Buyer in Bristol, you will benefit greatly from Specialist Mortgage Advice in Bristol. Your dedicated advisor will be able to guide you through the whole mortgage process and help you with your application, hopefully ensuring a favourable outcome down the line. To learn more about the mortgage process or to get the ball rolling on one of your own, please feel free to Get in Touch and take advantage of a free mortgage consultation.