Are you thinking of buying your first home? Maybe you’re worried about some of the things you’ve heard about buying a house. Will they hold you back? Not if they’re any of these mortgage myths. Read on to bust some mortgage myths.
Myth: Young people can’t get on the ladder
Fact: Nowadays, getting on the property ladder feels like an it would be a miracle if you could pull it off, pretty much no matter what age you are. For people in their 20s and 30s it might seem impossible.
But it’s not. The government wants to get you on the property ladder for the sake of the economy, so there are offers on the table to help you save for that daunting initial deposit. For one thing, lenders are now offering loans that go up to as much as 95% of the property’s value, which means you’d only have to raise 5% of the price as your deposit. There is also the Help to Buy scheme where the government will match your savings for your house deposit to a limit.
Myth: You need to have a perfect credit score to get a mortgage
Fact: The harsh reality of the situation here is that you will struggle to gain a mortgage with a bad credit history, but there are ways to fix that. You can make moves to aid your credit score in preparation for a mortgage, like paying off debt and paying on time.
But what’s worse than a bad credit score is no credit score. You might want to talk to a financial advisor about getting your credit score up.
Myth: It costs more to mortgage than rent
Fact: This one depends on the circumstances but isn’t often the case. In some cases, you are essentially paying your landlord’s mortgage, so it’ll be a little more for the sake of a profit. What you repay on your own mortgage might be lower than the local rent rates, plus you will be adding to the equity of your own home with each payment and your home will eventually be paid off, whereas paying rent will go on for as long as you are in the property.
Myth: Lenders will only offer mortgages to people in full time work
Fact: This is a common misconception that needs solving. Anyone who isn’t a full-time worker isn’t a risk and isn’t considered a risk by the banks. Today, there are so many ways to work, including freelance, flexible, contract working and more, forcing banks to take a much more individualistic approach to approving loans and assessing job situations. If you have regular, stable, and sufficient income, you are just as likely to be approved for a mortgage as anyone with a full-time job.
Myth: You can only get a mortgage from the company you bank with
Fact: It’s best to shop around. Your bank might offer you some good ISA rates but undesirable mortgage options. Instead, take your case to different lenders and see who will give you the best deal. In fact, you can use this as a negotiation tactic to get a better offer from your bank.
If you want to debunk anymore mortgage myths, then please contact us today.