Costly Habits Threaten Home Loan Approval: Gambling, BNPL Raise Red Flags – Money Advice Experts in Services

In the realm of home loan applications, certain costly habits have emerged as significant red flags that could jeopardize one’s chances of securing a mortgage. A recent survey conducted by Money.com.au involving 1000 participants shed light on the financial behaviors that could potentially hinder individuals from obtaining home loans. Among the participants, a notable 15 percent confessed to gambling being their primary financial vice, while 17 percent admitted to frequently utilizing Buy Now, Pay Later (BNPL) services, which lenders view as undisclosed debt.

The survey further revealed that 20 percent of respondents exhibited a tendency to delay bill payments, with Generation Z and Millennials being the most prominent culprits at 33 and 35 percent, respectively. Mansour Soltani, a mortgage expert at Money.com.au, emphasized that many prospective homebuyers are unaware of how their spending patterns can impact their mortgage applications negatively. Lenders meticulously scrutinize bank statements, and any signs of risky expenditures such as gambling, BNPL transactions, or late payments could categorize applicants as high-risk borrowers, potentially resulting in loan rejection.

Soltani highlighted gambling as a significant obstacle in the home loan approval process, asserting that even seemingly innocuous bets on sports or races could raise concerns among lenders. Similarly, he cautioned against the accumulation of multiple BNPL purchases, as this could indicate unsustainable spending habits to financial institutions. While acknowledging that occasional gambling activities like betting on major events might not drastically affect loan applications, he stressed that consistent gambling behavior could raise red flags.

David Thurmond, owner of Mortgage Choice Berwick, pointed out that any recurrent expenditure, regardless of the amount, could be viewed as ongoing living expenses by banks. He emphasized that repetitive transactions of a similar nature could trigger concerns among lenders. Additionally, factors like credit card limits and HECS-HELP loans are also taken into consideration by financial institutions when assessing borrowing capacity.

In conclusion, it is imperative for individuals seeking home loans to be mindful of their financial habits and expenditures. By avoiding risky behaviors such as gambling, excessive BNPL usage, and delayed bill payments, applicants can enhance their chances of securing mortgage approval. Financial prudence and responsible spending are key elements that can pave the way for a smoother and more successful home loan application process.

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