Gambling - affecting mortgage servicibility

Hi All,

one for the brokers. Recently I have read about gambling being assessed like 2 credit cards, as in $200 month spent reducing your loan max by over $120,000.

Not that I'm encouraging gambling, but it is important to know how it affects a potential new mortgage.

If I were to stop all gambling, how far back would banks usually look to consider my living expenses?

I also work regular overtime and get penalties. I understand that this requires a bit more examination. What's the safest timeframe the brokers would recommend before applying for a mortgage?

Thanks in advance

 

6 months generally. I have never had any indication that one of my clients is a gambler but this is how far back they check, or 3 months at the very least

 

In most cases we do a very thorough check on peoples transaction statements before sending it to lenders. I'd say about 50% of clients have some sort of gambling entry in the last 6 months.

In most cases it's the odd lotto ticket or similar, it's rarely more than $30. There'll often be a spike around a major sporting event such as a grand final or Melb Cup.

These are highly discressionary expenses, we ignore completely them and I'm happy to argue it with lenders but it's never been necessary.

I've never encountered anyone with a gambling problem (I don't go looking for distressed loans). I have met a few 'professional gamblers' but never written a loan for them. In that case I'd probably treat it more like a business and ask for tax returns to verify the income, treating the losses as business expenses.


Overtime and penalties are usually verified using the difference between the base salary and the annual income figure. Most lenders are going to want to see about 12 months history. Bonus' are usually verified as the lower of the last 2 years.