Why Gambling Could Affect Your Mortgage Loan
We have previously talked about how Australians are finding it even more difficult to buy the house of their dreams because of different factors. Also as previously mentioned, prospective buyers are experiencing some trouble applying for loans due to the Royal Commission into banking and wage stagnation. There are also talks about the credit scores but that topic is for another day. But it looks like another factor will make it harder for buyers to get approved for a home loan, although it’s for a specific group of people.
According to reports, gambling is now seen as a drawback in terms of applying for loans. Gambling, whether big or small is now being scrutinized by many lenders, specifically the gambling habits. If you’re one of those who is very much into gambling, you might want to think again.
So why would gambling affect your mortgage loan?
Gambling habits are good indicators of how responsible you are as a payer. Experts say that Australians are known to regularly engage in gambling activities which is why this it is said that this new way of looking at borrowing could affect a huge chunk of the population; Australian Institute of Family conducted a study that revealed over 574,000 Australians are very much into gambling. Borrowers who are engaging in such are under scrutiny.
Gambling as a red flag
Many lenders, especially big banks find that a gambling habit as a red flag. Why? Apart from the obvious risk that the borrower might be into deep with the wagering sport to the point that paying could turn out to be a nightmare, just the whole idea of someone constantly betting money alone is a red flag. Lending experts have confirmed that Australians with loan applications have been affected directly by their gambling habits. Lenders only have limited money to lend, so if a borrower regularly spends on gambling they would rather give it to another person who has a “cleaner” bank record.
Big ATM withdrawals could also cause some trouble
Because of stricter lending regulations, it would make sense why lenders are looking into everything with careful attention. Big ATM withdrawals could also get borrowers in trouble if it’s not explained properly and convincingly. There was an instance where a borrower made a big ATM withdrawal, and because the ATM was near a casino, it was then seen as related to gambling. This resulted in the borrower doing some explanation about it.
In general, gambling is not just all about the habits but it is also seen by the banks as a good character identifier. Banks use this to assess the borrower’s character. However, this does not mean that there’s no chance for those engaging in gambling activities to get their loans approved. Ultimately, it’s under the bank’s discretion and how well the person presents themselves and how transparent they are with their financial activities.
For now, borrowers must be aware that gambling could affect their application and so should make sure that they are ready for what lies ahead.