HILL EDITION | MORTGAGES
Mortgage myth busting Steve Partridge tackles 12 common mortgage myths 1 You have to be an existing customer of a bank to get approved for a mortgage.
What’s important to mortgage lenders is that you’re able to recover from large instances of spending and tighten the purse strings to a consistent pattern of saving. 6 Banks won’t approve single people for mortgages. When applying for a mortgage, the mortgage provider will be assessing your ability to make repayments, so they’ll only be looking at your accounts and loan records. Whether or not you’re single is none of their business and will not be taken into account when you’re being considered for mortgage approval. 7 I need a 20% deposit. You can purchase a new property with only a 5% deposit – there is a wide amount of mortgage availability for all customers. 8 I have bad credit and no one will offer me a mortgage. There are many lenders who will offer mortgages to people with credit issues; it’s best to speak to a professional who can guide you. 9 Lenders aren’t lending/aren’t lending that much. Lenders are enhancing affordability for customers in many ways. From Nationwide’s Helping Hand mortgage to Accord’s Income Boost, there are a few lenders that will go to 6x income, in the right circumstances. 10 The lowest rate is always the best deal. Seeking professional advice from a broker is key, because they
circumstances and what your preferences are, and then can guide you to the best potential outcome. 11 Once you have a mortgage, you’re stuck with it. Most mortgages come with an initial period when you are tied in, but once this is up you are then free to change lenders, the term and the product. 12 You need a perfect job history to get a mortgage. Most lenders want stability, but there are many lenders that will look at all types of circumstances, like being in probation, short gaps in employment and changing jobs.
Mortgage applications are assessed on a case-by-case basis. Being an existing customer of a mortgage provider will not make you any more or less likely to receive mortgage approval. Existing customers do not receive more favourable mortgage agreements either, so that’s two myths busted for the price of one. 2 Transactions to gambling websites will exclude you from being eligible for a mortgage. If your account shows a consistent history of transactions to betting sites, this may well raise red flags with mortgage lenders. The odd harmless flutter on the Grand National or the Eurovision result, however, won’t be held against you. 3 It’s impossible to get a mortgage if you’re self-employed. Being self-employed will not exclude you from buying your own home. Once you’re able to provide the necessary documentation, you’re as likely to be approved as any other applicant. 4 It’s cheaper to rent than to buy. While this myth isn’t as common as it used to be, it is still worth reiterating that, in some cases, mortgage repayments may be less than you’d be paying in rent. With buy-to-let mortgage rates being so high, these costs are just getting passed onto the tenants. 5 When applying for a mortgage you will be punished for your spending patterns. While your statements will be reviewed when you are applying for a mortgage, you will not be punished for the odd splurge.
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will take into account your current and future
It is worth reiterating that, in some cases, mortgage repayments may be less than you’d be paying in rent
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