When lenders ask for your bank statements, they will be looking for many different things. However, their main objective is to assess whether or not you are able to manage your money responsibly and is likely to keep up to date with their mortgage payments. In recent months, one question is being asked by applicants quite a lot: “do gambling transactions look bad on my bank statements”.
Regardless of whether you use casino and bingo sites online or take a stab at The Grand National every year, there is nothing illegal about properly licensed gambling. Many of the “bookies” as they’re affectionately known, advertise on mainstream TV and radio. To many, gambling is simply a hobby or pastime similar.
However, it shouldn’t be forgotten that even the gambling advertisers urge customers to “please gamble responsibly” and it is something highly important to remember when applying for a mortgage. Whilst it’s not up to the lender to tell you how to live your life, how to spend your money or indeed to moralise on the ethical rights and wrongs of gambling, they do have a duty (underscored by mortgage regulation) to lend responsibly to their customers.
If lenders need to prove to the regulators that they are being careful with their lending decisions, it isn’t entirely unreasonable of them to expect the people they lend to, to also be careful when it comes to their personal finances. Give it some thought; If you were lending your own money, would you lend it to the applicant who gambles recklessly or someone who is sensible?
Having the odd gambling transaction on your bank statements doesn’t automatically mean you will be declined for a mortgage. That being said, the lender will consider whether these transactions are reasonable and also responsible. They will especially look at the frequency of these transactions, the size of the transactions in relation to the person’s income and the impact it has had on your account balance.
If these transactions don’t happen to often, are not large amounts of money and make no significant impact on a regular credit bank balance, then they are not likely to be regarded as important. However, if you bet money frequently or you are constantly overdrawn, the lender is more than likely going to see that as being irresponsible and decline your mortgage application.
As discussed, lenders are looking at your bank statements to show how you manage your money and to help them determine whether or not you are financially stable or the evidence that you are not.
Remember, lenders are financial institutions that, either directly or as part of a wider group, tend to sell current accounts, overdraft facilities credit cards and personal loans. You must understand that these things can all play an important role in financial planning. The key for a mortgage applicant is how these facilities are all managed.
For example, having an overdraft facility and occasionally using it, is not necessarily a bad thing, whereas regularly exceeding the overdraft limit is not so good. With this in mind, lenders will look for excess overdraft fees or returned direct debits because these would normally show that the account is not being handled the best way by the customer.
Other things to look out for include credit transactions from payday loan companies; “undisclosed” loan repayments (i.e. if you said on the application that you have no other loans but there appear to be regular loan payments, this could be a problem); they would look out for any obvious missed payments; finally, they might also consider how much of a typical month is spent overdrawn – i.e. if you only just go into credit on payday and for the rest of the month are overdrawn, how sustainable is this mortgage?
The smart answer is, if possible, plan ahead. Generally speaking, a bank would ask for up to three months of your most recent bank statements. These will show your salary credits and all your regular bill payments. If you feel like you want to apply for a mortgage in the near future, try to make sure that you avoid anything that could harm your chances. Take a break from gambling for a short while and work on presenting your bank account in the best way you can.
As someone who provides expert mortgage advice in Nottingham, our team may be able to help you, as there are some lenders who may ask for fewer bank statements than others. Some may not even ask for them at all. However even these lenders would reserve the right to request bank statements in certain circumstances, so your best port of call is to be as smart as you can be ahead of making any mortgage application. Remember, if you do gamble, please gamble responsibly!
If you are a First Time Buyer in Nottingham who doesn’t know a lot about mortgages, you should definitely get some specialist mortgage advice in Nottingham from a trusted Mortgage Advisor. They will guide you through the whole mortgage process and help you with your application and get you on track with your finances.