10 Biggest Mortgage Myths You Should Avoid
It might be difficult to determine the best sort of mortgage for your new home. But, did you know that there are a number of little-known factors that can make all the difference? Online advice may be daunting at times, from determining how much of a deposit you’ll need to determining if you can get a mortgage if you’re self-employed. But you can always visit a mortgage advisor. They can provide more personalised advice.
We debunk some of the most prevalent mortgage myths or misconceptions here, attempting to demystify the strange and beautiful world of mortgages.
10 Mortgage Myths Debunked:
#1 – You need a better credit history.
You might be shocked to find that having some negative credit does not mean that you can not get a mortgage. However, there are a number of strategies to improve your credit score over time, including maintaining your credit card balances to about 50% of your credit limit. Although being approved for a mortgage with a low credit score might be difficult, it is achievable if you seek the appropriate advice.
Also Read: Why Do You Need Mortgage Broker and Perks of Having Mortgage Advisor
#2 – You need a big amount of deposit to buy your home.
This isn’t always the case, and it depends on a variety of circumstances. You can put as low as a 5% deposit to buy your first home, although there are other choices available.
Shared Ownership plans allow you to purchase a portion of your new property while paying rent on the remainder.
Investing is also a possibility for some people, and depending on your circumstances, it may be able to help you reach your savings target sooner.
#3 – A mortgage may only be obtained through your own bank.
Despite the fact that this appears to be a reasonable step, your bank may not be providing the greatest deal for your circumstance. It’s a good idea to verify rates with a whole of market Mortgage Adviser, who will research through hundreds of mortgage products to get you the best offer.
#4 – It’s usually a good idea to lock in your interest rate.
This isn’t always the case; it depends on your specific circumstance, financial resources, and risk tolerance. Although a fixed-rate mortgage might provide you with monthly cost certainty, the initial rate may be greater than a variable option sometimes if you are putting low deposit. Furthermore, if interest rates drop, your payments will remain the same, and you may be subject to penalties if you want to quit early.
Also Read: 5 Advantages of Using a Professional Mortgage Broker
#5 – Before you may acquire a mortgage, you must be a particular age.
You may be eligible for a mortgage if you are over the age of 18. Some specialised lenders (for example, for a buy-to-let mortgage) do, however, require a minimum age of 21, however this depends on the contract (there may be certain limits) and your financial position. For such things you can always take advice from Mortgage Advisors.
#6 – You must work full-time to qualify.
Most lenders recognise that many people are contracting nowadays as a result of the rise of flexible and freelance employment. There’s no reason to think a mortgage lender will turn you down if you can show that you have a consistent source of sufficient income being self employed or being on a Fixed Term contract.
#7 – Before applying for a mortgage, you should not look at any properties.
This isn’t the case because it is important to have an idea of the mortgage amount required. So, before you decide on your dream property, you should conduct some mortgage research or contact mortgage advisors to get an idea of how much your mortgage would cost.
Also Read: Mortgage Broker in Canary Wharf (E14), East London
#8 – When you’re self-employed, getting a mortgage is more difficult.
Although the process of getting a mortgage for employed people is generally easier than self-employed, it is not that difficult to get a mortgage if you have a good self employment history. A specialised lender may also be able to provide a mortgage with only one year’s worth of accounts. Their interest rates, on the other hand, are often higher.
Whatever your circumstances, it’s critical to get assistance from a certified Mortgage Adviser who can find you a suitable loan at a fair rate.
#9 – You need to have life insurance before getting a mortgage.
This is a popular mortgage myth that is false. The only form of insurance you’ll need before exchange of contract is building insurance, which is required by law. However, once you’ve been approved for a mortgage, life insurance is something you should really consider. This will ensure that the mortgage will be paid even if the worst happens and you die.
If you want to get life insurance, there are a variety of coverage alternatives to choose from, and we can assist you.
#10 – You can’t get a mortgage on a single salary.
Millions of individuals would not be homeowners if this were true! Acceptance for a mortgage is based on your income level, not whether you earn a single wage. Mortgage lenders will assess your ‘affordability,’ which is determined by accessing your income and expenditure. Other variables, such as the size of your deposit and your monthly outgoings, such as home expenses, will be taken into account.
It’s critical to get expert guidance from an independent Mortgage Adviser whether you’re a first time buyer or seeking to sell your home for the last time. After all, relocating is one of the most significant expenditures you will ever make, so why not be sure you’ve made the best decision possible?
Mountview FS has a great deal of expertise in the management of mortgage applications. Our specialist business security consultants will be able to provide you with the best guidance and level of coverage to suit your needs.
If you would like to hear more about mortgage applications with credit card debt or how Mountview Financial Solutions will help you protect your needs. You can reach us by email @ 02080950120 or send us your requirements at info@mountviewfs.co.uk!
