If you are a First Time Buyer in Birmingham buying a house without support is not always easy. It is undoubtedly one of the most exciting things to do in your life but perhaps the most expensive investment of one’s life that needs to get done with dire vigilance. Unless you have a respectable amount, you will need to take out a mortgage to finance a house.
Applying for a mortgage can be nerve-wracking, and perhaps a very daunting task. No lender lends money easily. Every Lender goes through a strict process of verifying a borrower’s credentials before lending you the loan. It’s important you have all documentation organised that will support you through the process of getting a mortgage. For further information how to be prepared, check out our article ‘Getting preparing for a mortgage in Birmingham‘.
Once you decide to seek mortgage advice in Birmingham, you need to notice that the law demands lenders to lend money responsibly. It will require careful observation of bank statements or the creditworthiness of a borrower. However, lenders cannot grant you credit if they think that you cannot service the debt or found that you are financially weak.
Mortgage lenders require you to provide them with recent bank statements from any account with readily available funds, be it a salary or savings account. The purpose of carrying out such activity is to confirm that you will afford the down payment and make your monthly mortgage payments successfully without any delays.
You might be pondering how bank statements can act as proof of the creditworthiness of a borrower. One trend that has come to the forefront is the question of gambling transactions on bank statements. Let us discuss each question in detail for better clarification.
Typically, gambling and the mortgage does not go together. Taking out a mortgage means that a bank acknowledges a borrower’s creditworthiness and that a borrower can make timely payments. But if a bank finds out that you are a professional gambler, using your winnings as evidence that you can afford to take out a mortgage, it might lead to the mortgage getting declined. However, there is nothing illegal about licensed gambling. Many people practice gambling occasionally or simply as a pastime or a hobby.
You might have noticed that even the bookmakers and gambling advertisers urge customers to gamble responsibly. Therefore, we advised keeping this in mind when applying for a mortgage loan. While it is not the Lender’s job to tell you how to live your life, how to spend your money, or indeed to moralize on moral rights and wrongs of gambling but they do have a duty to lend you prudently.
Suppose lenders need to prove to the regulators that they are making prudent lending decisions. In that case, it isn’t entirely unreasonable of them because you would adopt a similar approach when it comes to lending your finances to anyone needy.
Gambling indeed presents a higher risk to the Lender. However, as we mentioned above, it is not illegal to gamble, so just because you have the odd gambling transaction on your bank statements does not mean you will get automatically declined for a mortgage. That depends on the type of gambling, the amount of money you bet, and the frequency of such transactions, all play a significant part when lenders make their decision.
If your bank statements show a pattern of unaffordable, high-risk betting, you may find that lenders’ choice gets drastically reduced. Lenders will compare the level of gambling concerning your income so small flutters that do not often or affect your finances may get accepted.
On the contrary, if you bet more often and get overdrawn continuously, the Lender will likely count you as irresponsible and potentially decline your application.
As we’ve seen, lenders look at your bank statements to identify how well you manage your money and to help them establish a viewpoint against you that either gives them the confidence that you are financially prudent or not.
Please note that the lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities, credit cards, and personal loans. Therefore understand that these things can all play an essential part in prudent financial planning.
The key for a mortgage applicant is to what extent these facilities get managed. For example, having an overdraft facility and occasionally using it, is not inherently wrong, but regularly exceeding the overdraft limit is not considered satisfactory. Thus, lenders will look for excess overdraft fees or returned direct debits because these would generally show that the account is not getting well managed.
Other things to notice consist of the credit transactions from pay-day loan companies. A credit score is highly influential in almost all financial transactions. If you mismanage your credit and earn a low credit score, you’ll be less likely to qualify for loans or credit or end up with a high-interest rate on a loan and low terms and conditions. Therefore being a responsible credit score holder shows that you are trustworthy.
The simple answer is to be sensible and, if possible plan ahead and plan carefully. Typically, 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. Thus, if you know that you’re likely to apply for a mortgage loan soon, try to ensure that you avoid any of the above pitfalls.
Take a break from gambling for a short while and work on presenting a strong bank statement. Often when you seek Mortgage Advice in Birmingham, you’ll observe that some lenders may ask or may not ask for your bank statements. So to be on the safe side, if you do gamble, please gamble responsibly.
If you are a First Time Buyer in Birmingham who needs more information about the world of mortgages, it’s key to get some Specialist Mortgage Advice in Birmingham from an expert Mortgage Advisor. Throughout the process, they can provide you with the best help and support you need to get you on track with your finances.