Does Gambling Affect Mortgage Application Uk
Applying for a mortgage can be a lot of work. There are documents to collect, mortgage brokers to talk to and application forms to fill out. One aspect of the process to think about is how your credit history might affect your chances of successfully applying for a mortgage.
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- There is no clear-cut answer for whether or not a mortgage lender will refuse to lend you money based upon your gambling deposits. However, if they can see regular payments into online gambling operator accounts, these may present a cause for concern. Why lenders have to look into your spending habits.
- One question that often arises is whether gambling affects mortgage applications and the simple answer is – yes it does. If a bank is weighing up whether they think you will be able to repay the mortgage loan, they will want to know if there are any concerns that could potentially stop you from doing so.
A mortgage in principle (also called ‘mortgage application in principle’ or ‘mortgage decision in principle’) is a statement from a lender that says they will lend you a specific amount based on the information you have provided. It is not a guarantee, but an indication that they would be willing to lend you the money ‘in principle’. TLDR - how do large gambling transactions affect a mortgage application. TLDR - how do large gambling transactions affect a mortgage application. One way for borrowers to avoid bank statements falling foul of lender underwriting is to shift the majority of spending to a credit card in the run-up to submitting an application, which is then paid off in full each month. Alternatively switching some payments, such as gambling, to cash could also help ease applications through.
For many people, a mortgage is the biggest form of loan they’ll ever get, and mortgage lenders want to know that the debt will be paid back. Below, we answer some key questions about why your credit history might matter when getting a mortgage.
How does your credit history affect getting a mortgage?
Lenders use your credit report to get information on how reliable you have been at paying back debts in the past. When you apply for a mortgage you will have to supply payslips, P60s and bank statements to show how much you earn and what your monthly budget might look like. This shows lenders your current financial situation, but to predict how you might behave in the future they will also look at your credit report.
Your credit history might also affect your mortgage interest rate, in the sense that the types of mortgage you are offered will be affected by how responsibly you’ve borrowed in the past. Special introductory rates or other attractive mortgage offers might only be available to people whose credit history meets certain criteria.
Can you get a mortgage with no credit history?
It may be possible to get a mortgage if you have no credit history, but there’s a fair chance it will make things harder. If lenders have nothing to go on, they can’t be sure whether you are a responsible borrower who will pay back the money you’ve been given. If you do find a lender willing to offer you a mortgage, it might not be the type you’d prefer and the interest rate might be less competitive.
If you are worried that your lack of credit history might affect the success of your application, you might want to take some time to build a history before applying. There are specialist credit cards for people who have not used credit before, as well as other ways of building a credit history.
Can you get a mortgage with credit card debt?
Credit card debt won’t affect your ability to get a mortgage by itself. It depends on how big the debt is, how capable you are of paying it back and how well you have kept up repayments. A small amount of debt that you make regular payments on could be fine if you earn enough to cover both credit card and mortgage payments. On the other hand, if you have defaulted on credit card payments or have run up debt on several cards, lenders might decide you are too much of a risk.
Helping to improve your credit score
If you’re thinking of a buying a home and want to improve your chances of being approved by a lender, you’ll want to make sure your borrowing history is in good shape. There are different factors that affect your creditworthiness and you can read in more detail how to get credit-ready for a mortgage application in this article.
Things that can help improve your creditworthiness include making payments on loans, credit cards and bills on time each month. You should also make sure you are on the electoral register so that lenders can verify your address.
When you make an application for credit, it is reflected in your credit report as a ‘credit search’. If you make a lot of applications, it might suggest to lenders that you are reliant on credit. So, if you plan on applying for a mortgage, it might be helpful to be selective above what other loan applications you make.
To find out more, you can check your FREE Equifax Credit Report & Score which gives you a view of your borrowing history as well as an indication of how creditworthy a lender may find you. It’s free for the first 30 days and £7.95 monthly thereafter.
Getting approved for a mortgage can be challenging, but there are steps you can take to boost your chances.
Here, we reveal 10 things that could affect the likelihood of you securing a mortgage, and offer tips on how to overcome them.
1) Having large amounts of outstanding debt
Does Gambling Affect Mortgage Uk
Generally speaking, it is possible to get a mortgage with credit card debt.
Lenders may be reluctant to grant you a mortgage, however, if you have large amounts of outstanding debt from personal loans and credit cards.
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This is because having to pay off other loans will directly impact how much (and whether) you can afford your mortgage repayments each month.
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For this reason, it’s really important to pay down as much debt as possible before making a mortgage application.
While your student loan will not be considered the same as other forms of debt, your lender may take it into account when working out whether or not you can afford to take out a loan. Read will my student loan affect my mortgage? to find out more.
2) Having a bad credit score
If you’ve got a bad credit history, County Court Judgements (CCJs), or a bankruptcy on your record it can be really difficult to get approved for a mortgage.
This is because lenders use your credit history to judge your ability to stay on stop of debt.
Missing or making late payments on a previous mortgage, loan, credit card or even your mobile phone bill could potentially scupper your chances of being accepted for a mortgage.
All hope isn’t lost if you have an adverse credit history though, as it may be possible to get approved for a bad credit mortgage.
However, rates on bad credit mortgages can be high, so it may be better to spend time improving your credit score and then applying for a regular mortgage.
3) Having no credit history at all
Applying for a loan with limited or no credit history is a bit like applying for a job without a CV.
Since your credit score lets lenders know how reliable you are at making repayments and handling your debt, you’ll need to have some form of history to be approved for such a large loan.
It’s important to check your credit score before applying for a loan and, where possible, take steps to build up a good credit score before making a mortgage application.
4) Not being on the electoral roll
The electoral roll allows lenders to verify your identity quickly. Not being registered will make it difficult for a lender to confirm who you are.
This could slow down the mortgage application process, as your lender will probably request additional identification checks, and it could even result in your application being rejected altogether.
The good news? Getting on the electoral roll couldn’t be simpler; all you have to do is fill out a form using the register to vote service on Gov.uk.
5) Buying a ‘non-standard’ property
The type of property you’re looking to buy could affect the success of your mortgage application.
Ex-local authority housing, for example, can be appealing as these types of home are often cheaper than others on the open market. Most lenders, however, are reluctant to grant mortgages on this type of property as they are considered more likely to lose value over time.
Similarly, you may find it difficult to get a mortgage for a flat above commercial premises like shops, pubs or restaurants, as they are at a greater risk of being affected by things like noises, smells, rubbish and security issues, which can also bring down the value of the property.
For more information check out our story, 16 properties to avoid if you want to get a mortgage.
6) Trying to borrow too much money
It’s important to do the maths and be realistic about how much money you can afford to borrow.
Typically, mortgage lenders will only lend a maximum of four-and-a-half times the combined annual income of you and anyone else you’re buying with. Asking for a loan above this threshold will likely result in your application be rejected – and you may well find that you’re offered less than the maximum.
- Find out more: how much mortgage can I borrow?
7) Being self-employed
Mortgage providers can be reluctant to approve a loan to self-employed workers.
This is because, without a contract of employment or regular payslips, it can be difficult to prove that you’ll be able to keep up with mortgage repayments.
If you’re self-employed and are hoping to buy a home, it’s vital to compile documents proving your past income and future opportunities for payment. Most lenders will want to see at least two years’ worth of accounts.
- Find out more: mortgages for self-employed buyers
8) Major lifestyle changes
Going through major lifestyle changes that could affect your finances, such as starting a family or going through a divorce, could negatively affect your mortgage chances.
Some lenders may partly base their decision on whether and how much to lend you on childcare fees, for example. Find out more in does having children ruin your mortgage chances?
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Similarly, if you are expecting a child and going on maternity leave at the time of applying for a mortgage, lenders may be wary of how much you’ll be able to afford if you’re expecting a decrease in income. Read our guide on getting your mortgage when pregnant for more information.
And if you’re hoping to get a mortgage after getting divorced, it’s important to re-evaluate your financial circumstances, especially if you’re buying alone. Our guide on selling a house in a divorce shares everything you need to know about securing a new home.
9) Errors on your application
Lenders scrutinise every mortgage application with a close lens, so it’s really important to make sure all of the information you give your lender is correct and up-to-date.
Any discrepancies or inaccuracies on your application could not only slow down the loan process, it could also result in your loan being turned down altogether.
- Find out more: how to improve your mortgage chances
10) Applying to the wrong lender
So your finances are in great order, your credit score is impeccable; everything should be smooth sailing, right? Not always.
Each lender will have its own affordability criteria and may place more weight on certain factors. For example, while some lenders may be more willing to accept applications from households with growing families or self-employed applicants, others may have more rigid criteria.
It’s important to find the lender most likely to accept your financial and personal circumstances the way they are – and this is where the expertise of a mortgage broker can really help.
Speak to the experts
Whether you’re a first-time buyer or home mover, applying for a mortgage can be a stressful and daunting prospect.
Speaking to a mortgage broker can not only help you find the best mortgage deals, but also find the most suitable lenders for your personal and financial circumstances.