Mortgage Myths
Embarking on your journey towards a mortgage and stepping onto the property ladder can be an incredibly exhilarating experience. However, acquiring accurate and relevant information is crucial before beginning your homeownership path.
Distinguishing fact and fiction can be challenging, mainly when certain mortgage myths have circulated for many years. In the following article, we will unveil the truth behind some commonly heard mortgage misconceptions.
You can’t get a mortgage with a bad credit rating!
While it is true that lenders generally prefer borrowers with higher credit scores due to lower risk, it does not mean that obtaining a mortgage with a poor credit rating is impossible. Lenders understand that not everyone can achieve excellent credit scores. While it is true that lenders typically favour borrowers with higher credit scores due to lower risk, it is not an insurmountable obstacle to securing a mortgage with a poor credit rating. Lenders recognise that not everyone can attain excellent credit scores, and that’s why specialist lenders have emerged to address this need. 
These lenders specialise in catering to individuals with less-than-perfect credit histories, providing options and solutions for those who may need to meet the criteria of traditional lenders. Therefore, introducing specialist lenders has expanded the possibilities for obtaining a mortgage, even with a poor credit rating.
At Connect, we collaborate with specialised lenders. We have extensive experience and offer mortgage options tailored to assist you in entering the property market or needing a remortgage; even if your credit is severely damaged, there is still hope for you.
The likelihood of securing a mortgage will depend on the seriousness and recency of your credit issues. However, having bad credit does not automatically disqualify you from obtaining a mortgage.
You can’t get a 95% mortgage anymore!
While it is true that lenders have become more cautious with mortgage loans since the global financial crisis in 2008, it is not accurate to say that you can no longer obtain a 95% mortgage. Lenders still offer such mortgages, and the Government has even announced an extension to the Government Mortgage Guarantee Scheme, specifically supporting lenders with high loan-to-value mortgages.
When considering a 95% mortgage, seeking advice early in the process is crucial to understand associated costs and determining your eligibility comprehensively. The mortgage market continually evolves, introducing new schemes and products regularly. Therefore, staying updated by regularly checking for news and updates regarding mortgage options is advisable.
Credit card payments, hire purchases, debt and other outgoings won’t affect my application!
Contrary to the statement, it is true that monthly outgoings, including various expenses such as loans, utility bills, debt repayments, car finance, car leasing, and student loans, are considered when assessing your mortgage affordability. Lenders carefully evaluate these expenditures to gain insight into your disposable income. 
In the case of hire purchases or financed purchases, lenders typically annualise the amounts and deduct them from your annual income. Additionally, lenders conduct thorough assessments of your financial situation to anticipate potential changes in circumstances, ensuring both parties are confident that mortgage repayments can be consistently met.
It is essential to recognise that these factors can influence your application for a mortgage. It is recommended to clearly understand your financial situation and be transparent with lenders regarding your existing obligations. Providing accurate information about your income, expenses, and debts will enable lenders to make an informed assessment of your mortgage application.
There’s no point looking into mortgages until you’ve found a property.
It is crucial to debunk the common misconception that researching mortgages should only begin after finding a property. In fact, it is advisable to start exploring mortgage options before you begin your home search. This early research provides several advantages, such as establishing a reasonable budget for your house hunt and giving you a competitive edge when offering potential properties.
Obtaining pre-approval for a mortgage can demonstrate your commitment to purchasing a home and make your offer more appealing to sellers. By researching mortgages ahead of time, you can save time and money. Don’t let the misconception hold you back. Start your mortgage research today and take a step closer to realising your dream of owning a home.
Once you have identified the type of loan that best suits your needs, it is essential to compare different lenders to find the most favourable rates and terms. Shopping around is crucial because even a seemingly small difference in interest rates can translate into substantial savings or costs over the life of your mortgage. Additionally, selecting the right lender can ensure a smooth and efficient loan processing experience. By investing time in researching mortgages before you begin your property search, you can streamline the entire home-buying process.
Lastly, it is essential to understand that being pre-approved for a loan only guarantees final approval once you find a property. Lenders may require updated financial information and impose additional requirements to complete the mortgage process. Therefore, it is crucial to maintain open communication with your lender and promptly provide any necessary documents. With proper preparation and thorough research, you can confidently find a mortgage loan that aligns with your needs.
Only first-time homebuyers are eligible for special mortgage conditions!
There is a widespread misconception that special mortgage conditions are exclusively designed for first-time homebuyers. While it is true that several government initiatives are specifically targeted towards individuals who have not previously owned a property, it is essential to note that there are still viable options available for non-first-time buyers. 
To explore the possibilities, consult a mortgage broker who can provide valuable insights and guidance regarding the various schemes suitable for your specific circumstances. By seeking professional advice, you can understand the options comprehensively and make informed decisions about the mortgage or loan that best suits your needs, regardless of whether you are a first-time buyer.
In conclusion, it is vital to dispel the common myths surrounding mortgages. Awareness of these misconceptions empowers you to make well-informed decisions regarding your home loan and confidently approach the property market. Investing time in thorough research, staying informed about current trends, and seeking expert advice are all crucial steps in ensuring a seamless process when purchasing or refinancing a property. With a combination of knowledge, guidance, and patience, you can find the perfect loan that aligns with your needs and embark on a rewarding journey towards homeownership.
