Lenders will look out for a variety of things when it comes to assessing your bank statements. They do this in order to see what your spending behaviours are like to determine whether or not you will keep up with your mortgage payments or not. A common question we find crops up when speaking to customers is: “do gambling transactions look bad on my bank statements”.
You might enjoy putting down an annual bet on the grand national or regularly use internet betting sites, as you can tell, there is nothing illegal about properly licensed gambling. It is known to be a popular hobby or pastime with many bookmakers advertising it on mainstream TV and radio.
If you have seen these adverts, you have probably noticed that they always urge customers to ‘please gamble responsibly’ and this is an important point you should think about when applying for a mortgage. It’s not the lender’s job to dictate your spending habits or moralise the ethical pros and cons of gambling, however, they do have a duty (underscored by mortgage regulation) to lend responsibly.
Think about it this way, if lenders need to prove to the regulators that they are making well-judged lending decisions, it’s fair for them to expect a similar approach when it comes to their personal finances. If you were lending your own money would lend it to the applicant who gambles or the one who doesn’t?
As stated previously, it is not illegal to gamble. With this in mind, you will not be declined by a mortgage if you have the odd gambling transaction on your bank statements. The lender will decide whether these transactions are reasonable and responsible. They will look in detail of how frequent these transactions are, the size of the transactions in connection with the person’s income and the impact upon the account balance.
Having infrequent small gambling transactions that make little difference on a regular credit bank balance will not likely be seen as important. On the flip side, placing bets most weeks or being constantly overdrawn, the lender will view your spending behaviours as irresponsible and decline your application.
As you know, lenders will look at your bank statements to basically see how you manage your money and to help them determine whether they are confident in you managing payments or not.
Lender are financial institutions that either directly or as part of a wider group, usually sell current accounts, overdraft facilities credit cards and personal loans, therefore, you need to know that these factors all go towards wise financial planning. It’s good for a mortgage applicant to know how these facilities are managed. You might have an overdraft facility and occasionally use it, which is not essentially a bad thing, however, exceeding the overdraft limit regularly which is not so good. If you have excess overdraft fees or returned direct debits, these would be things lenders will look for and will show them that your account is not being managed well.
As well as this, lenders will also look for credit transactions from pay-day loan companies; “undisclosed” loan repayments (i.e. if you said on the application that you have no other loans but there is regular loan payments appearing, this could be an issue). They would also look out for any missed payments and they see how much of a typical month is spent in overdraft – i.e. you might go into credit on payday and for the rest of the month you are overdrawn, you need to wonder how you would manage with a mortgage.
You can be sensible and plan ahead if you can. Usually, a bank still request up to three months of your most recent bank statements. These documents will show your salary credits and all your regular bill payments. Because of this, it’s best that you avoid any of the situations above, especially if you are looking to apply for a mortgage in the near future. You could avoid gambling for short period and work on presenting your bank account in the best way.
Seeking help and support from Mortgage Broker in Coventry can be helpful because there are some lenders who may ask for fewer bank statements than others or may not request them at all. Despite this, lenders do still have the right to reserve the right to request bank statements in particular circumstances so it’s best that you be as prudent as possible when you are in the midst of any mortgage application. Remember, if you do gamble, please gamble responsibly!
In the circumstance where you are a First Time Buyer in Coventry who doesn’t have a lot of knowledge about mortgages, it’s you get some specialist advice from an expert Mortgage Advisor in Coventry. Throughout the process, your dedicated advisor will provide a helping hand with your application and work hard in getting you up to date so that lenders will be impressed.