Starting your journey to secure a mortgage and climb the property ladder is an exciting experience. However, obtaining accurate information is essential before embarking on the path to homeownership.
Separating fact from fiction can be difficult, especially when long-standing mortgage myths continue to spread. This article aims to uncover the truth behind some of the most common mortgage misconceptions.
You can’t get a mortgage with a bad credit rating!
While lenders generally prefer borrowers with higher credit scores due to lower risk, having poor credit doesn’t make securing a mortgage impossible. Many lenders understand that not everyone can achieve excellent credit ratings, leading to the emergence of specialist lenders.
Specialist lenders focus on helping individuals with less-than-perfect credit histories. They offer tailored solutions for those unable to meet traditional lenders’ criteria. As a result, the introduction of specialist lenders has increased opportunities for those with poor credit to access mortgage options.
At Connect, we work closely with specialist lenders. With extensive experience, we provide mortgage solutions designed to help you enter the property market or remortgage your home. Even with severely damaged credit, options are available.
The possibility of securing a mortgage will depend on the severity and timing of your credit issues. However, poor credit does not automatically disqualify you from achieving your homeownership goals.
You can’t get a 95% mortgage anymore!
While it is true that lenders have become more cautious with mortgage loans since the 2008 financial crisis, obtaining a 95% mortgage is still possible. Many lenders offer these mortgages, supported by the Government’s extension of the Mortgage Guarantee Scheme to assist with high loan-to-value options.
When considering a 95% mortgage, seek advice early to understand costs and assess your eligibility fully. The mortgage market changes frequently, with new schemes and products introduced regularly. Staying informed by checking for updates on mortgage options is highly recommended.
Credit card payments, hire purchases, debt and other outgoings won’t affect my application!
Contrary to the statement, monthly outgoings, including loans, utility bills, car finance, and student loans, are assessed for mortgage affordability. Lenders carefully review these expenses to understand your disposable income and financial commitments.
Lenders often annualise the costs and deduct them from your yearly income for hire purchases or financed agreements. They also conduct thorough checks on your finances to predict changes in circumstances, ensuring mortgage repayments remain manageable.
These factors can significantly impact your mortgage application. It’s vital to understand your finances and disclose all obligations clearly. Accurately about income, expenses, and debts helps lenders assess your application effectively.
There’s no point looking into mortgages until you’ve found a property.
Challenging the misconception that mortgage research begins only after finding a property is vital. In reality, exploring mortgage options early offers significant advantages. It helps establish a realistic budget and strengthens your position when bidding on properties.
Securing mortgage pre-approval shows sellers your commitment to purchasing a home. This step can make your offer more attractive. Early mortgage research saves time and money, ensuring you’re better prepared. Don’t let myths delay your progress—start exploring mortgages now to move closer to owning your ideal home.
After identifying the most suitable loan type, compare lenders to secure favourable rates and terms. Even slight differences in interest rates can lead to substantial savings over time. The right lender also ensures a smoother loan process. Researching mortgages before house hunting streamlines the entire buying journey.
Remember, pre-approval does not guarantee final loan approval. Lenders may request updated financial details or additional documents. Stay in regular contact with your lender and respond promptly to their requests. With proper preparation, you’ll confidently secure a mortgage that meets your needs and helps you achieve homeownership.
Only first-time homebuyers are eligible for special mortgage conditions!
There is a widespread misconception that special mortgage conditions apply only to first-time buyers. While many government initiatives cater to those who have never owned a property, it’s important to recognise that options also exist for others.
To explore your options, consult a mortgage broker who can offer insights into schemes suited to your circumstances. Professional advice ensures you understand your choices and select the mortgage or loan that meets your needs, regardless of your buyer status.
Debunking common myths about mortgages is essential. Awareness of these misconceptions allows you to make informed decisions about home loans and confidently approach the property market. Conduct thorough research, stay informed about current trends, and seek expert advice to streamline the process of purchasing or refinancing. With the right knowledge and support, you can secure a loan that fits your needs and embark on your journey towards homeownership.
Thank you for reading our publication, “Our Guide to Mortgage Myths 101 | By Connect Mortgages.” Stay “Connect“-ed for more updates soon!
