My about to be strange situation as a Professional Poker Player seeking a mortgage

Jas0nP

Hey all.

On Tuesday i have my first appointment of what i imagine will be many to speak about a mortgage and i'm looking for a little bit of a heads up in what to expect. I'm also curious about what people would do in my situation and anything i should be doing.

6 years ago at 18 i dropped out of studying maths at university to be a professional poker player. Poker earnings aren't taxable in the UK so i will have no accounts or proof of income to show when i go to these mortgage meetings.

I currently have £250k to my name which has amassed from earning roughly ~£75k/year. £100k of this is in my banks savings account. £30k of this is locked up in poker staking deals, £20k locked up in my poker bankroll and £100k waiting to be cashed out. So £200k liquid. Of which £160k could be used as a down payment if need be.

My credit rating is good but income hitting my bank is very very irregular, usually big amounts infrequently, this doesn't represent my income whatsoever, my income or if you want to call them winnings is extremely regular just not my cash outs.

So i've been viewing Manchester apartments in the wide range of £150k - £500k. As i wasn't sure what i wanted or what i should buy or what amount of mortgage would be available to me.

So here are the many questions.

What do you guys imagine i will be able to borrow?

What do you think should be the largest downpayment i should make?

What price range of places would you personally in this situation think of buying? What do you think is the wisest?

Anything i should know? Anything you advise?

Many thanks as always.

opinions4u

What do you guys imagine i will be able to borrow?

Probably nothing. While gambling winnings are usually considered to be tax exempt, I understand that professional gamblers should declare their income for tax.

What is the "net profit" figure in your accounts for each of the last 3 years?

(by the way, I am most impressed with your success).

Jas0nP

Having spoke to an adviser in the past and all my poker playing friends having done the same with have all been told we don't need to declare.

Net profit on my accounts each year has been steady around the 75k mark. It's been more in recent years with the dollar getting stronger against the pound.

opinions4u

Jas0nP wrote: »

Having spoke to an adviser in the past and all my poker playing friends having done the same with have all been told we don't need to declare.

Mmmm ... could be right!

http://www.hmrc.gov.uk/manuals/bimmanual/bim22017.htm

Net profit on my accounts each year has been steady around the 75k mark. It's been more in recent years with the dollar getting stronger against the pound.

I'd love to see what the brokers say to this one. Accounts available but no tax to pay ... how does that allow a lender to assess suitability to borrow?

I'm ducking out of this thread due to not having anywhere near the knowledge needed to help!

Bermuda_John

no tax on gambling winnings!!!!!!

Otherwise you would jsut go to the bookies and collect a bin full of losing bets to offset against your winnings!!

Basically, one risk of being a professional gambler is that you cant get a mortgage.

Just one of the downsides that you'll have to accept

Jas0nP

I expect i'll get one but i'll be expected to put down a larger downpayment than the average person. This is the situation that most of my US gambling friends have had but that was also pre tightening the lending standards.

Cozworth806

So why can't you just buy a flat/house mortgage free if you have £250k to hand? Unless self certs make a dramatic re-entry then that is your most likely option

whitedan2001

I also have a large income from poker but also work a (semi) full time job as a self employed musician. having just applied for a mortgage my poker earnings were of no use what so ever when calculating what I could borrow. This was especially annoying as the bank have been quibbling over a few £k difference in my earnings.

I would suggest keep playing and buy somewhere outright- seems like your not far off with £200k. Or get a parent to act as guarantor?


Also poker earnings in uk are not taxable. (according to my accountant.)

You might wanna post on some of the poker forums (2+2, blonde etc)

GL

chivers1977

I have had a complaint from a customer who was a professional poker player who was looking for a mortgage. We needed him to declare the income to the HMRC in order that they could then respond in writing that there was no taxable income. He did not do this. Most lenders want to see either paylslips, audited accounts or tax returns. Otherwise how do they know you earn what you earn / the money coming into your bank account is legitimate / want to take a risk on you? .....................

Kavanne

Keep saving up for another year or two and buy outright!!

benjo

Im not any kind of advisor, so please feel free to dismiss anything said here as being nothing more than an amateur attempt at being helpful.

When applying for a mortgage different lenders have different lending criteria, simple so far.

Most of them will take 100% of your taxed, provable, employed (as opposed to self employed), basic wages into the income multiple calculations - not so simple since you are not employed, dont pay paye, have wageslips etc. Many will take a % of overtime payments or bonuses - these payments are not usually calculated at 100% of their value since overtime and bonuses are not guaranteed to be earned/payed - a bit like your winnings.

Some lenders will lend to the self employed - although far fewer these days, mostly these lenders require 3 years audited accounts ie a paper trail to the tax man - since you are not liable for tax this does not apply, therefore no paper trail.

Some lenders will take into account a % of 'other income' certain DWP benefits, maintainance payments etc. These are not usually taken at 100% since like overtime payments they are not guaranteed, benefits/maintainance could be stopped/changed at any time.

I guess you would be viewed as extremely high risk for a lender so your interest rate would probably be really horrible, you have no job, irregular (if above average) income, non tax payer and ultimately you have no guaranteed income - this might seem harsh, it isnt meant to be but perhaps underwriters might think you just got lucky over the last 3 years and the next 25 years could be aweful or perhaps as chivers says, they might think your income is not legitimate.

On a positive note you have enough spare cash floating around to buy a place out right, ok it wont be a .5 million place just yet.

But do the figures yourself, buy cash £160k vs £160k mortgage = save on interest about 120k over 25 years, that is assuming you got an interest rate of 5% if you get a higher interest rate of say 7% you would be saving nearer to 180k!!, wait for the market to improve sell and trade up, if your income reduces no worries that you will loose your house as well as your shirt.

Goodluck in your gaming and in your house buying, let us know how you get on.