Navigating the world of mortgages can feel daunting, especially with the abundance of myths and misconceptions floating around. As a UK mortgage broker, we often encounter misinformation about various aspects of the mortgage process. These myths can cause unnecessary stress and even deter some from pursuing homeownership altogether. Today, we’re here to debunk some of the mortgage myths you may have heard, so you can approach your mortgage journey with confidence and clarity.
Myth 1: You Need a Perfect Credit Score to Get a Mortgage
One of the most persistent myths is that only those with a perfect credit score can secure a mortgage. While having a good credit score certainly helps, it’s not the only factor lenders consider. In the UK, lenders assess your overall financial situation, including your income, outgoings, and how you manage your finances. Even if your credit score isn’t flawless, there are mortgage options available for various credit histories. Specialist lenders, for example, cater specifically to those with less-than-perfect credit.
Myth 2: You Must Have a 20% Deposit
The belief that you need a 20% deposit to buy a home is outdated. While a larger deposit can give you access to better mortgage deals, there are numerous options for those with smaller deposits. In fact, there are mortgages available with deposits as low as 5%, some can be even less. Government schemes like Help to Buy and shared ownership also allow buyers to get on the property ladder with reduced deposit requirements. It’s always worth speaking to a mortgage broker to explore the options that suit your circumstances.
Myth 3: Self-Employed Individuals Can’t Get Mortgages
Many self-employed individuals worry that their employment status will prevent them from securing a mortgage. While it’s true that lenders may scrutinise your financials more closely, being self-employed does not automatically disqualify you from getting a mortgage. Lenders will typically require evidence of stable income, such as two to three years of accounts or tax returns. Working with a mortgage broker who understands the needs of self-employed borrowers can help you find the right lender and product.
Myth 4: You Can Only Get a Mortgage from Your Bank
It’s a common misconception that you should get your mortgage from the bank you already bank with. While it might seem convenient, sticking to one lender could mean missing out on better deals elsewhere. Mortgage brokers have access to a wide range of lenders, including those that do not deal directly with the public. By comparing different offers, a broker can help you find a mortgage that better fits your needs and financial situation.
Myth 5: Once You Have a Mortgage, You’re Stuck with It
Some people believe that once they’ve secured a mortgage, they’re locked into it for the duration of the term. However, mortgages can be quite flexible. Many borrowers choose to remortgage after a few years, especially when their initial fixed-rate period ends. Remortgaging can allow you to take advantage of better rates, release equity, or switch to a different type of mortgage that better suits your changing needs. Always review your mortgage options periodically to ensure you’re not missing out on potential savings.
Myth 6: You Can’t Get a Mortgage If You’re Over 50
Another widespread myth is that those over 50 can’t get a mortgage. While some lenders may have upper age limits, many are willing to offer mortgages to older borrowers, especially if they can demonstrate a reliable income and the ability to repay the loan. There are even specific mortgage products designed for older borrowers, such as retirement interest-only (RIO) mortgages. Age should not be a barrier to homeownership, and with the right advice, many over-50s can secure a mortgage that works for them.
Myth 7: Mortgages Are Only Available During a Full Moon
A completely absurd notion that lenders only process mortgage applications when the moon is full, leading to a rush of nighttime applications every lunar cycle.
Myth 8: The Larger Your Pet, the Higher Your Mortgage Rate
A ridiculous myth that claims the size of your pet directly influences your mortgage interest rate, with larger pets leading to higher rates due to the supposed damage they might cause.
Final thoughts
Whilst admittedly we are yet to hear the last 2 myths from customers the world of mortgages is filled with misconceptions, but armed with the right information, you can navigate it with confidence. Whether you’re a first-time buyer, self-employed, or considering remortgaging, there’s likely a mortgage product out there that suits your needs. Speaking to a mortgage broker can help you cut through the myths and find the best options for your unique situation.
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
