Key takeaways
- Using sports betting or other gambling income to qualify for a mortgage isn’t a common practice, but it’s possible.
- If you want to include winnings on your loan application, be prepared to demonstrate a consistent history of earnings and submit appropriate tax documentation.
- Whether or not you use winnings to apply for a loan, your lender will scrutinize big deposits or withdrawals in your bank account.
Football season is upon us. Sports betting offers a chance at victory for your bank account — but what might it mean for your long-term odds of becoming a homeowner? Can that income help you make a down payment and get a mortgage? Here’s what the experts say.
Can you use sports betting income to qualify for a mortgage?
Nearly 20 percent of Americans have an account with an online sports betting service, according to one study. In theory, those people could use those winnings — as long as they’re documented and verifiable — to supplement income on a mortgage application.
In practice, it’s much more complicated.
“It’s difficult but can be done with enough history,” says Phil Crescenzo Jr., vice president, Southeast division at Nation One Mortgage Corporation. “A casino or online betting establishment would issue a 1099 for the winnings, which could then be filed on a tax return. In 24 years, I’ve only been able to use this a small handful of times, and it was not easy.”
For income to be considered for a mortgage, there has to be a “likelihood of continuance,” Crescenzo Jr. says. If you don’t have a history of winning regularly, in consistent amounts, that income won’t suffice for a loan application.
Additionally, you might have to dig to find a willing lender, says Matt Dunbar, senior vice president, Southeast region for Churchill Mortgage.
“It’s crucial to verify that the lender or mortgage product does not have restrictions on using gambling income before proceeding,” Dunbar says.
In 24 years, I’ve only been able to use this a small handful of times, and it was not easy.
— Phil Crescenzo Jr., Nation One Mortgage Corporation
No matter how good your record looks, be ready for some challenges. Take Chris “Fox” Wallace, a professional poker player who has raked in big in the World Series of Poker, including a past championship that netted more than $507,000.
Initially, Wallace was offered costlier bank statement mortgages, most often sought by self-employed borrowers who provide bank statements as proof of income. They’re a riskier product, so lenders charge higher rates.
“Finding a lender who is hungry enough, and wants to fight for you, is tough,” Wallace wrote last year on CardsChat, an online poker community. “I called dozens of people, had meetings with nearly a dozen, and was ready to go get a job and wait a year to get a better loan rate, when I finally found someone who was able to get me a standard rate.”
Will sports betting hurt your mortgage application?
Having a DraftKings, FanDuel or other online sports betting account — and whether you post wins or losses — won’t automatically prevent you from obtaining a mortgage.”
The presence of a sports betting account, and even minor earnings or expenses associated with it, don’t necessarily raise concerns for a lender during the mortgage process,” Dunbar says. “If a borrower has a history of gambling expenses or losses but manages their debts and qualifies for the mortgage, these activities are unlikely to raise red flags.”
The lender might be concerned, however, if there’s a steady trail of losses over two to three years, according to Dunbar. That pattern could suggest a riskier borrower.
“Regular gambling activity might prompt further examination of one’s financial management and means,” Dunbar says.
Crescenzo Jr. says you might try to avoid the additional scrutiny by setting up a separate bank account exclusively for sports betting.“Anything connected to a main [bank] account will definitely be viewed very closely,” Crescenzo Jr. says.
Do I have to tell my lender I bet on sports?
If you’re simply planning on placing a few bets with friends this year, you don’t need to proactively tell your mortgage lender that it plays any role in your earnings. “Documenting winnings is necessary only if an applicant wants that income to be considered in their debt-to-income ratio,” Dunbar says.
Other acceptable sources of income for a mortgage
There’s no set income requirement to qualify for a mortgage. Lenders look at a measure called the debt-to-income ratio, or DTI, to determine whether you can reasonably repay a specific loan amount at a certain interest rate.
Aside from sports betting income, you can apply for a mortgage with many income sources, including:
- Employment income (including self-employment income)
- Rental income from a property you own
- Stock dividends
- Interest on savings accounts
- Disability payments
- Social Security payments
The same rules apply, however: The income has to be documented and reliable.
Bottom line
If you’re thinking about buying a home and using sports betting winnings to help pay for it, know that it might be more difficult to work those into a mortgage loan application. The winnings have to be consistent and documented, and you’ll need to find a lender who’s willing to work with you. The good news: There are many other sources of income acceptable for a mortgage. If you’re not sure whether your income suffices, talk to your loan officer to see whether you qualify.