Real Estate
Gambling can raise red flags to lenders and banks when assessing a person’s home loan application. Picture: John Appleyard
Costly habits of prospective Aussie homebuyers are posing red flags to lenders and banks when they’re applying for mortgage loans, and some are more detrimental than one might believe.
A Money.com.au survey with 1000 participants revealed 150 respondents (15 per cent) admitted gambling was their worst financial habit, while 170 (17 per cent) said they regularly used Buy Now, Pay Later (BNPL) products which banks considered a form of undisclosed debt.
One in five participants (20 per cent) procrastinated paying bills, with Generation Z (33 per cent) and Millennials (35 per cent) the worst offenders.
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Money.com.au mortgage expert Mansour Soltani said many aspiring homebuyers didn’t realise their spending habits could derail their mortgage application or see it rejected entirely.
“Lenders go through bank statements with a fine-tooth comb,” Mr Soltani said.
“If they see risky spending patterns like gambling, BNPL transactions, or late bill payments, you could be classified as a high-risk borrower and they can decline your loan.”
Regular betting can be detrimental to a person’s home loan application. Picture: John Appleyard
He added that gambling was one of the “biggest home loan killers”.
“It’s not just about casinos, regular bets through a bookie, even small, casual punts on the footy or weekend races, can raise red flags with lenders,” he said.
“BNPL might seem harmless, but to banks, it’s just another form of debt.
“If you’re stacking up multiple BNPL purchases, lenders could see it as a sign that you’re living beyond your means.”
But Mortgage Choice Berwick owner David Thurmond said any regular spending, whether that was a weekly trip to McDonalds or Friday night takeaway could be considered as ongoing living expenses.
“(If) you see the same type of transaction over and over and over again, that’s going to raise the bank’s concern,” Mr Thurmond said.
Regular use BNPL products like Afterpay and Zip can indicate to a lender or bank that a person is living beyond their means. Picture: Nikki Short
For those who like to punt on the horses, the mortgage broker said an occasional bet at Melbourne’s Spring Carnival wasn’t going to be detrimental to a person’s home loan application.
But both banks and brokers took note when they saw instances of gambling regularly.
Other personal finance factors taken into account by lenders and banks were credit card limits as well as HECS-HELP loans.
“HECS is a big issue with borrowing capacity right now,” he said.
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sarah.petty@news.com.au
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