Unusual Circumstances - Can I get a mortgage?

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Left_Blank

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Hi,

I'm a 24 year old professional internet poker player thinking of trying to buy a property within the next year or so. Currently I rent. The obvious problem with this is that it's difficult for me to prove my income through traditional methods and there is a stigma attached because people (ie. potential lenders) consider poker to be gambling.

I usually keep all my money online in various ewallets and just transfer money to my bank account as I need it. I've been playing poker full time for the last 1.5 years and I can show €55,000 worth of credits to my bank account over that period. For the 2 years previous to that I was in full time third level education (engineering) and playing poker on the side. I have records of credits totalling €35,000 during that timeframe. I have credit card statements going back about 2 years with average spend of ~€400/mo all paid off by direct debit each month with no late payments.

I have no outstanding debt and have never taken a loan from a finantial institution.

Current net worth is ~€70,000 highly liquid. Projected earnings for 2009 are €100,000 - €120,000.

I can also show various earnings graphs/data, risk of ruin calculations and countless simulated earnings projections. I've recently started keeping a personal budget each month too.

Would it be possible for me to secure a mortgage at all given my current situation? Also can you please advise me as to anything I can do to help improve my chances.

If there's any further information I can provide which would be of assistance in answering my questions please ask.

Thanks a lot.
 
askalot said:
Consider?

It is; isn't it? :)
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lol I knew this would be the first thing pointed out. I'd rather not get into it too much but essentially over short sample sizes it is but over long periods of time it's not. Like flipping a weighted coin over and over again. Betting on any one flip is a gamble but over a million flips the person who bets on the weighted side will win.

Actually that reminds me if it helps my case with a mortgage lender can show confidence interval maths which basically describes statistically how likely I am to win x amount of money over y period of time. eg. statistically I can show with 95% confidence that I will earn €50,000 or more in 2009.
 
I'll gladly pay you 10% of all my poker earnings this year if you guarantee me that I'll earn between €100k-€120k.
 
Mainstream lenders won't take a second look but sub-prime lenders (Start or Springboard) allow you to self-certify your earnings and once they see a percentage (60%) of those earnings crediting a bank account they are happy. Interest rates are very high though because of higher risk! I'd just keep renting if I was you and save 60k p.a. for next 5 years to have 300k to spend! Surely you can live off 40-60k of your poker earnings! I have got to learn how to play poker!!!
 
There is risk for lenders lending to anyone be they PAYE, self employed, sportsperson or even gamblers.

For a PAYE you would need to be in full time employment for 6 - 12 months without probation, for self employed you need to have 2 years audited accounts, sports people needed to be on a 4 year contract so just moving on from this I would say you would need to show at least 5 good years (at a guess) of consistent earnings before a lender would approve a mortgage due to the risk involved. As you have decent savings, you loan to value could be quite low (unless you need the cash as your bet money). Try and put some aside for a deposit if possible i.e into a savings account that is not touched. This will show a record of savings to the lender which is what you really need to do.

I have never had a request from a poker player but your best bet :)o) is to approach your own bank. They will have a record of your deposits (income).

Hopefully with 5 years of consistent 100k+ earnings, you will get sponsorship, hit the WSOP, win a couple of bracelets and then just buy your new house in cash!
Good luck with it.
 
sivelr said:
Mainstream lenders won't take a second look but sub-prime lenders (Start or Springboard) allow you to self-certify your earnings and once they see a percentage (60%) of those earnings crediting a bank account they are happy. Interest rates are very high though because of higher risk! I'd just keep renting if I was you and save 60k p.a. for next 5 years to have 300k to spend! Surely you can live off 40-60k of your poker earnings! I have got to learn how to play poker!!!
Click to expand...

Thanks for this I wasn't aware of these companies. I've heard of other poker players being refused mainstream lending but offered 'private financing options' on the side, obviously at higher interest rate. I guess this is pretty much the same thing.

I could keep renting and saving of course but my long term goals at the moment involve purchasing multiple properties as investments and I believe financing becomes easier if I own my own home. I guess then I could show regular mortgage payments to prospective lenders to fortify my case.
 
NorfBank said:
There is risk for lenders lending to anyone be they PAYE, self employed, sportsperson or even gamblers.

For a PAYE you would need to be in full time employment for 6 - 12 months without probation, for self employed you need to have 2 years audited accounts, sports people needed to be on a 4 year contract so just moving on from this I would say you would need to show at least 5 good years (at a guess) of consistent earnings before a lender would approve a mortgage due to the risk involved. As you have decent savings, you loan to value could be quite low (unless you need the cash as your bet money). Try and put some aside for a deposit if possible i.e into a savings account that is not touched. This will show a record of savings to the lender which is what you really need to do.
Click to expand...

I only need about 20-30k of my money to be liquid at any one time so it's not a problem putting the rest of the money down as a deposit. I currently keep ~€20k online and the rest in various savings accounts and term deposits. Obviously there are pros and cons when putting down a huge % of the value of a property at the start which I would need to weigh up and consider but I was aware that I may be expected to put a larger amount outright than someone in more mainstream, steady employment.

Could you tell me would it help if I credited my bank account with a regular amount each month every month or is it ok to do it more sparingly but with larger lump sums?

NorfBank said:
I have never had a request from a poker player but your best bet :)o) is to approach your own bank. They will have a record of your deposits (income).
Click to expand...

Makes sense.


NorfBank said:
Hopefully with 5 years of consistent 100k+ earnings, you will get sponsorship, hit the WSOP, win a couple of bracelets and then just buy your new house in cash!
Good luck with it.
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heh if only it were that easy. Thanks for the post.
 
Left_Blank said:
Thanks for this I wasn't aware of these companies. I've heard of other poker players being refused mainstream lending but offered 'private financing options' on the side, obviously at higher interest rate. I guess this is pretty much the same thing.
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It's more than just a higher rate-these lenders tend to be a lot more 'ruthless' in dealing with arrears etc. Do a search for 'sub-prime' and 'Start Mortgages' and appraise yourself of as many of the other issues as possible. The rate itself would often be enough to put me off to be honest.
 
If you can make 100,000 this year and already have 70,000 what do you need a mortgage for at all with the price of houses. You have cash bargaining power, you could top up with a car loan amount and get a 3bed semi in most areas of the country now
 
The way I look at it is: you are self-employed, mainstream lenders will require 3 years of certified accounts. Do you pay tax on your earnings?
 
Left_Blank said:
lol I knew this would be the first thing pointed out. I'd rather not get into it too much but essentially over short sample sizes it is but over long periods of time it's not. Like flipping a weighted coin over and over again. Betting on any one flip is a gamble but over a million flips the person who bets on the weighted side will win.

Actually that reminds me if it helps my case with a mortgage lender can show confidence interval maths which basically describes statistically how likely I am to win x amount of money over y period of time. eg. statistically I can show with 95% confidence that I will earn €50,000 or more in 2009.
Click to expand...

Judging by the performance of financial institutions over the past few years, I suspect that you understand confidence intervals and testing hypotheses better than the bankers!
 
dontaskme said:
Judging by the performance of financial institutions over the past few years, I suspect that you understand confidence intervals and testing hypotheses better than the bankers!
Click to expand...

Surely that would all depend on whether you were talking about the t-test or z-test.....;)

BM
 
Left_Blank said:
Current net worth is ~€70,000 highly liquid. Projected earnings for 2009 are €100,000 - €120,000.
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I don't see how this can be taken as guaranteed though?

As much as I envy your lifestyle (and poker prowess!) lenders will be very dubious of lending you money in the hope that you continue to win at poker, considering the vast majority of people lose money playing poker.

But good luck to you.
 
johnno09 said:
If you can make 100,000 this year and already have 70,000 what do you need a mortgage for at all with the price of houses. You have cash bargaining power, you could top up with a car loan amount and get a 3bed semi in most areas of the country now
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Would that be a good idea though? I'm still learning with this stuff but does that not mean I would be really exposed to the real estate market and depreciation. If I put all my money into one property like that makes it impossible for me to diversify my investments and ties up a huge % of my capital.

I'd love if other people would weigh in on this. Could just buying with cash be a good idea? Please keep in mind that assuming buying a home goes well I'd like to purchase an investment property (a triplex or something) soon after.
 
RMCF said:
I don't see how this can be taken as guaranteed though?

As much as I envy your lifestyle (and poker prowess!) lenders will be very dubious of lending you money in the hope that you continue to win at poker, considering the vast majority of people lose money playing poker.

But good luck to you.
Click to expand...

I's not guaranteed, it's a projection based on various assumptions just like any other business projection is.

From my own long term experience in the game though I know it to be a virtual certainty that I win at least €50k and I can provide evidence to that effect. Whether or not people would be willing to take heed of the evidence though is another matter.

This thread is encouraging to say the least though because at least I know now there is a chance I wont be laughed out the door of most lending agencies!
 
More people go broke than get rich playing poker so it is difficult for a lot of people to see it as a profession / business. You seem to have a clear understanding of how to play professionally and have a strong business acumen by keeping clear documentation and planning for the future.

My understanding, which may be wrong, is that your earnings/ profit from poker are taxable as you are a professional player or it is your main source of income. Depending on what structure you have pursued, sole trader/ limited company etc. you should have be able to approach mainstream lenders in approximately a year. Remember one of our lenders prides itself on lending to actors and surfing teachers. Is you income less reliable than acting or the Irish weather?
 
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