In the world of mortgages, misinformation often clouds the path to homeownership. Let’s shine a light on more common myths, empowering you to pursue your dreams without stumbling over falsehoods.
Myth 1: “Securing a Mortgage While Self-Employed is a Herculean Task”
Yes, the self-employed face rigorous checks, but an increasing number of lenders cater to this demographic. With a network of over 90 lenders, our advisers streamline this process, walking you through the options available.
Myth 2: “Receiving Benefits Means I Can’t Qualify for a Mortgage”
Contrary to belief, many lenders consider applicants on benefits, especially if backed by other income streams or assets. Demonstrating your ability to meet repayment schedules could open doors to securing a mortgage.
Myth 3: “Age is a Barrier to Obtaining a Mortgage”
Age isn’t the roadblock it’s often perceived to be. Several lenders extend their mortgage offerings to applicants over 80, provided there’s sustainable income. Exploring later-life mortgages or equity release could also offer viable options.
Myth 4: “I’m Not Responsible for Mortgage Payments After a Breakup”
Joint financial commitments persist even after a breakup. Both parties remain liable for debts, impacting credit scores if not managed properly. Seek guidance on separating yourself from a former partner’s property and debts.
Myth 5: “Bad Credit Means No Mortgage Options”
Having a history of bad credit doesn’t automatically disqualify you from getting a mortgage. While it may limit your choices, several lenders specialize in offering mortgages to individuals with less-than-perfect credit scores.
Factors to Consider:
- Specialist Lenders: Some lenders cater specifically to individuals with adverse credit histories, offering products tailored to their needs. These mortgages often come with higher interest rates or require larger deposits.
- Credit Repair: Taking proactive steps to repair your credit score can improve your eligibility for mainstream mortgage products. Timely bill payments, reducing outstanding debts, and registering on the electoral roll are among the actions that positively impact creditworthiness.
- Deposit Size: A larger deposit can mitigate the impact of a poor credit history. It demonstrates to lenders a commitment and reduces their risk, potentially increasing your chances of approval.
- Seek Professional Advice: Consulting with a mortgage advisor specialising in adverse credit situations is beneficial. They can offer insights and guidance on suitable lenders and steps to enhance your eligibility.
While bad credit might pose challenges, it doesn’t automatically eliminate mortgage options. Exploring specialist lenders, improving credit health, and seeking advice can significantly enhance your prospects for securing a mortgage.
Myth 6: “Freelancers or Gig Workers Can’t Secure Mortgages”
It’s a common misconception that freelancers or gig workers struggle to secure mortgages due to their variable income. While verifying earnings might differ from traditional employment, many lenders now consider this income type. They may assess your income over an average of years rather than months to determine loan eligibility.
Myth 7: “High Deposit is the Only Way to Secure a Mortgage”
While a larger deposit often offers favourable terms, many lenders offer mortgage deals with a lower deposit. You might require a minimum of 5-10% of the property value, but various options are available to help first-time buyers with smaller deposits.
Myth 8: “Student Loans Prevent Mortgage Approvals”
Having a student loan doesn’t necessarily obstruct mortgage approval. Lenders primarily assess your ability to afford monthly repayments based on your income-to-debt ratio. The student loan itself might not influence the decision, but the overall financial picture will be considered.
Myth 9: “Homeownership is Unattainable with Irregular Income”
Irregular income can present challenges but doesn’t preclude homeownership. If you’re self-employed or have varying income streams, lenders may assess your earnings over a more extended period, considering your average income to ascertain affordability.
Myth 10: “Applying for Multiple Mortgages Damages Credit Score”
Each mortgage application does prompt a hard inquiry on your credit report, which can have a slight impact on your credit score. However, if multiple inquiries occur within a short time frame, such as within 14-45 days (depending on the credit scoring model), they’re often counted as a single inquiry. Responsible and well-timed applications won’t significantly harm your credit score.
If you’re looking for a mortgage, look no further! Get in touch with our team, and we’ll point you in the right direction.