Does Gambling Affect Mortgage Applications?

In short, yes, gambling can affect your mortgage application.

But that doesn’t mean you necessarily have to cut out every form of gambling this second if you’re looking at buying a house in the near-ish future. After all, gambling can include a wider range of activities than we sometimes realise - the National Lottery, a friendly poker night and even a charity raffle would all count as gambling, but would be pretty unlikely to raise any eyebrows in the office of a mortgage provider.

So, how much gambling is too much when it comes to your mortgage application? How can you ensure you don’t run into problems when buying a house? And why does it matter to mortgage providers in the first place?

In this article, we’ll break down all you need to know when it comes to applying for a mortgage with a history of gambling, so that you can start the search for your perfect home without any niggling doubts in the back of your mind.

Before we go any further, remember: if you’re finding that you’re gambling more than you mean to, or that your gambling is causing you financial difficulties, get help. Regardless of whether it could have an effect on your mortgage application, the best thing to do if your gambling is getting out of control is to stop.

Please bear in mind that we are not financial advisors. For personalised, expert advice, get in touch with dedicated financial advisors who can give you the information you need.

Why Would Gambling Impact Mortgage Applications?

When a mortgage provider is considering whether to grant a mortgage application, their prime concern is affordability. The only thing they really care about is whether you’ll be able to make your mortgage payments in the years to come - they’re there to make a profit, and they won’t be able to do so if their customers can’t afford their mortgage payments.

From a lender’s point of view, someone with a history of gambling can be an unnecessary risk. Frequent or habitual gamblers are, as a rule, losing a certain amount of money every month to betting. When that’s a small percentage of their earnings, that’s not really a problem - and could be looked at as just another hobby with a small monthly cost - but the nature of gambling means that the losses often start spiralling.

When gambling becomes so frequent or expensive that it has a financial impact on other aspects of someone’s life - for example, causing them to miss other payments, or to cut into their food budget - that’s a major warning sign to a bank that gambling is likely to hamper that person’s ability to afford a mortgage.

Lenders are, understandably, risk-averse. It’s therefore not surprising that, in this situation, they’ll probably decide it’s not worth the risk of lending to someone whose gambling raises doubts about their ability to afford a mortgage.

What Effect Will A Gambling History Have On Mortgage Brokers Or Providers?

It all depends on just how much gambling you’re doing, and how much of your income you’re devoting to it.

Very occasional gambling is unlikely to cause a problem, so there’s no need to worry if you’re buying a lottery ticket every so often, or if you bet on a horse a couple of times a year during the big racing festivals.

The two main things a lender will look at when considering your application are affordability and eligibility.

Affordability

Above all, lenders want to be confident that you can afford the mortgage you’re applying for. If you’re already struggling to afford your existing financial commitments, that will give a lender pause, and that’s even more the case when you factor gambling into the mix.

The source of the money you’re using to gamble with will also be taken into account. If your gambling can be afforded comfortably from your disposable income, that’s not going to be too much of a red flag to a lender. If you’re borrowing to fund your gambling, however - whether that’s through credit cards, loans, or your overdraft - that’s a clear sign that your gambling is problematic, and that you’re not a safe bet as a customer.

Eligibility

Eligibility refers to whether you have a clean credit history and a large enough deposit for the mortgage you’re applying for - so gambling doesn’t have a direct effect on it.

However, the two combined can make a significant difference to your chances. If you meet lenders’ eligibility criteria, a history of gambling will be a relatively small factor in the decision-making process.

If, however, you have a poor credit history or a small deposit, lenders will weigh your gambling history much more heavily, and be much less likely to approve your application.

What Happens If You’re Refused A Mortgage Due To A History Of Gambling?

If you’ve applied for a mortgage and been declined, whether due to your gambling history or for other reasons, it’s not a good idea to immediately apply elsewhere. Whenever you submit a mortgage application, lenders will perform a hard check on your credit history - and too many applications don’t look good on your credit file.

If your gambling history is the reason your mortgage application has been refused, you’ll need to make some financial changes before applying again, to give yourself the best possible chance of success.

1. Give up gambling

The most immediate and obvious thing to do is to stop all gambling activity straight away. You might not consider yourself to have a gambling problem as such, but clearly lenders do. If you want a mortgage provider to have confidence in you as a customer, you need to demonstrate financial responsibility, to prove that you can be trusted.

2. Establish good financial habits

In most cases, gambling won’t be the only reason a mortgage application will have been turned down. To better your chances in the future, you should look at your finances as a whole and work to improve them. That could mean paying off credit cards and other loans, building up savings, or reducing expenditure, depending on your situation. You may also need to consider finding ways to increase your income, if you’re only just scraping by month by month.

3. Improve your credit score

If you’ve already addressed number 2 in this list, your credit score will hopefully start to improve anyway - but it can be helpful to take steps specifically aimed at raising your credit score. Making sure you’re as up to date as possible on any financial commitments and establishing the habit of paying off any credit cards promptly will help to improve your credit file. It’s also worth making sure you’re on the electoral register, as this can give your credit score a quick and immediate boost.

4. Consult with brokers

Before applying for a mortgage again, it’s worth speaking to brokers to explain your situation. If they’re aware you’ve been turned down for a mortgage, but that you’ve made financial changes since, they’ll be able to target your application to the lenders most likely to be understanding of your circumstances, thus reducing the chances of an application being refused.

How Can Gamblers Avoid Problems With Mortgage Applications?

Generally speaking, lenders will look at 3 - 6 months worth of bank statements, so the very safest thing to do is to stop gambling entirely for 6 months before starting mortgage applications.

Certain types of gambling are also considered riskier than others. Frequent betting on games or events with entirely random outcomes (e.g. bingo, scratchcards or lotteries) is looked on less favourably than anything involving skill (e.g. poker or sports betting), especially if you’re actually making some money from it. It can also be more concerning to a lender if you’re betting significant amounts across large numbers of bookies, which can be an indication of problem gambling.

If you’re generally financially responsible, a certain level of gambling within your means may not cause you problems at all - however, to maximise your chances of success with a mortgage application, it really is best to minimise your gambling as far as possible, or simply to stop entirely.

What About Matched Betting?

Matched Betting is not the same thing as gambling, of course, but we’re well aware that not everybody realises there’s a difference.

So what about lenders? Logically, if you’re making a profit from Matched Betting, that ought to be evidence of your financial responsibility, not the opposite! After all, for a lot of people, Matched Betting has allowed them to save up a deposit in the first place.

It’s certainly possible that lenders will look more favourably on Matched Betting than straightforward gambling if you explain your side hustle when making your application - and as you’ll be making a profit, there shouldn’t be any concerns regarding affordability.

Still, Matched Betting tends to involve a lot of gambling transactions on your bank account with lots of different bookies, which is bound to raise a few eyebrows. To be on the safe side, we’d recommend giving up Matched Betting for 6 months prior to applying for a mortgage, just to make sure that you don’t cause yourself any problems.

What About Professional Gamblers?

For professional gamblers, the situation is a bit different. You can’t just give up gambling - it’s how you earn your living! - but a lot of lenders will be very wary if they hear your income is entirely based on gambling.

However, that doesn’t mean you won’t be able to get a mortgage at all, just that you’ll probably have to be quite selective when it comes to who you apply with.

You’d be wise to consult with a mortgage broker before making any applications, as they will know which lenders are likely to refuse any application from a professional gambler, and which might be more willing to consider you as an applicant.

If you’ve been making your living from gambling for some time, and you’ve been successful at it, you may well be considered to be no more of a risk than any other self-employed person whose income can vary from month to month. You’re also less of a risk if the proportion of your total funds at stake at any one time is very low (e.g. if you’re frequently staking £100, but have substantial savings that aren’t touched).

The other problem is providing evidence of your earnings. As gambling earnings aren’t taxed, you won’t have a history of tax returns to demonstrate your income, which again will put some lenders off.

Nonetheless, if you’re a successful professional gambler and you’ve been making a good living for several years, with the right broker and lender you’ve got a good chance of getting a mortgage.

Does Gambling Affect Your Credit Score?

As a rule, no, gambling doesn’t directly affect your credit score. While a bookie may occasionally perform a soft credit check when you sign up with them, this won’t have a direct impact on your credit score.

However, gambling can have an indirect effect on your credit score, if it causes you to turn to borrowing or credit cards to continue to fund your gambling habit. Your credit score would then be impacted by any unsafe debt in the same way that a mortgage application would be.

If you do find that your gambling is becoming problematic, there is professional help available to get you back on the right track.

Summary

Gambling activity certainly can have an impact on your mortgage application - and the more you gamble, the greater the impact it will have.

While lenders will often take into account the circumstances of your gambling, and the level of risk you’re exposing yourself to, it’s still best to stop gambling - or Matched Betting - 3 - 6 months before applying for a mortgage, to give yourself the best chance of success.

You’d also be wise to establish responsible financial habits whether you gamble or not, and to save for the largest deposit you can. As well as boosting your chances of getting the very best mortgage offer you can, you will in general be in a far stronger financial position as a result - and that’s never a bad thing!