Could Online Casino Gambling Affect My Mortgage Application?

Yes, excessive gambling and erratic behavior from your bank account can lead to the lender declining your mortgage application. This article will explain how the application process works and which factors are deemed risky.
Isabella Johnson
Expert: Isabella Johnson Fact Reviewer & Journalist
Experience: Casino safety and gambling research. Her work has been featured on the BBC, CNet, Wired and The Financial Times.

How Does Online Gambling Affect Mortgage Applications?

Could Online Gambling Affect Mortgage Application

Gambling at an online casino isn’t wrong, but it’s your gambling patterns that matter when it comes to a mortgage application. If you’re spending large amounts of money in online casinos or any other form of gambling, for that matter, it raises concerns for a lender.

After all, you wouldn’t lend money to someone who will have trouble paying back the loan. The money you use for gambling must be within budget and infrequent. If you’re using credit to finance your gambling activities, it will impact your mortgage application adversely since it increases your risk

But First… Understand How the Mortgage Application Process Works

Every mortgage lender wants to know if you can repay the loan. The application process involves an affordability and credit check to understand your financial standing.

 Lenders will consider the following aspects when processing your application. 

Income - Proof of employment or source of income. It can include a salary, weekly wage, dividend- or rental income. Gambling winnings are also considered income by the Internal Revenue Service (IRS), which means lenders take them into account. Find out if your winnings are taxable in the state you’re gambling.

Expenses - Includes any committed payments you make, such as rental, insurance, utility bills, and other living costs. 

A credit check is done to view your payment history and how you’ve been servicing your debt. Based on these factors, you will receive a credit score, which lenders use to determine that you’re not at high risk for a mortgage repayment. 

How Do Lenders See Frequent Gambling as a Risk Factor?

Financial institutions want to minimize their risk when lending money. When you spend money in an online casino or any other form of gambling, a paper trail informs lenders of your activity. You may be considered a risk when you gamble a significant part of your income or regularly deposit funds into your casino account.

What Factors Do Lenders Consider Regarding Gambling?

Lenders will evaluate your profile in depth to determine if they can take the risk and lend you the money for your mortgage. These are the factors they consider. 

Gambling frequency - how often you place bets.

Size of your spending - is the money disposable income or critical?

Recent history - when last did you spend money on gambling?

Employment history - how stable is your position to support the mortgage payments? 

Online Gambling & Bank Statements 

When submitting a mortgage application, you must submit your recent bank statements, usually the last three to six months. The lender will comb through the information in the document to review how you spend your money. 

If they find that you spend a large portion of your income on gambling activities, it won’t be favorable. Additionally, regular payments to online casinos may alarm the financial institution. 

Online Gambling & Credit Score 

Gambling doesn’t directly affect your credit score. As the name suggests, managing your existing credit determines your rating. 

The credit report doesn’t consider your transactions at an online casino or the money you have in your bank account. It specifically deals with your ability to service your debt. 

When Gambling Becomes a Concern for Lenders? 

Lenders see red flags for your mortgage application when you: 

● Spend a large portion of your salary on gambling.

● Use online casinos regularly.

● Take credit to place bets.

● Gamble beyond your means.

What’s the Role of Gambling in Risk Assessment?

Ultimately, banks want to know that they can take a risk on you by lending you the money for a mortgage. During the process, gambling can increase your risk to the lender. The bank views it as a risk even if you’ve been lucky and won a significant jackpot. Here’s how financial institutions view different types of gambling. 

Occasional Gambling 

The odd wager a couple of times a month isn’t a bad thing. The bank won’t view this type of gambling negatively. 

Frequent Gambling 

If you gamble often, it sends the wrong signals to the lender. You come across as reckless and someone who may be addicted to gambling, which could prevent you from repaying the mortgage in the future. 

Budget-Friendly Gambling 

When you’ve budgeted a specific amount for entertainment every month and decide to spend that money on gambling, you won’t become a risk to the bank. Overspending on your budget regularly may be a problem, but when it’s clear that you only spend disposable income, your application won’t be affected. 

Credit Card Gambling 

Taking out credit just to gamble indicates you’re not great at managing your finances. Borrowing money to gamble will have lenders viewing you as a high-risk individual.

I’m a Professional Gambler - Will This Affect My Mortgage Application?

Because gambling, in essence, is a risk, professional gamblers won’t be regarded as a stable option for lenders. Naturally, it’s a volatile form of income that can fluctuate monthly.

While your bank account may reflect that you can afford to repay a mortgage without a consistent income, financial institutions will regard you as the highest risk.

Having said that, some banks may use your professional gambling income to approve your mortgage. However, it usually includes them charging you a higher interest rate than average and may even require a significant down payment. These organizations follow these steps to guard themselves against the enormous risk they take by approving your mortgage.

Manage Your Finances for Mortgage Approval!

You can implement a few changes in your financial matters to enhance your chances of approval for a mortgage. Refrain from gambling activities for at least three months to demonstrate that you’re not addicted and can avoid gambling altogether. Regular and occasional players should follow this step.

Lenders will always look into your debt-to-income ratio. When you clear your debt, your profile becomes more attractive to a financial institution that requires confidence to loan you the money.

Avoid taking any large items on credit, such as for a car or furniture, and always be regular with any existing credit card or loan debt. Always create a monthly budget and stick to it. As a result, you will better understand how much you can spend on gambling per month. 

Resources & Sources

  1. Kindbridge Behavioral Health. (n.d.). Will Online Gambling Affect Your Mortgage Application Too? Kindbridge. Accessed 16 January 2024, <https://kindbridge.com/gambling/will-online-gambling-affect-your-mortgage-application-too/>
  2. Mortgage Advice Bureau. (n.d.). Does gambling affect a mortgage application? Accessed 16 January 2024, <https://www.mortgageadvicebureau.com/getting-a-mortgage/does-gambling-affect-a-mortgage-application/>
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