To help clear up any confusion over mortgages we’ve debunked some of the most common mortgage myths.
MYTH: You have to be an existing customer of a bank in order to get approved for a mortgage
BUSTED: Mortgage applications are assessed on a case by case basis and 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.
MYTH: Having transactions to gambling websites will exclude you from being eligible for a mortgage.
BUSTED: If your account shows a consistent history of transactions to betting sites this may well raise red flags with mortgage lenders but the odd harmless flutter on the Grand National or the Eurovision result won’t be held against you.
MYTH: It’s impossible to get a mortgage if you’re self-employed
BUSTED: 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.
MYTH: It’s cheaper to rent than to buy.
BUSTED: While this myth isn’t as common as it used to be it is worth reiterating that, in some cases, mortgage repayments are less than the rent that would have to be paid if the property was rented.
MYTH: You have to provide a 20% deposit
BUSTED: This is not true in all cases. First-time buyers are eligible for mortgages up to 90% of the value of the home meaning that they need to save or otherwise find a 10% deposit.
MYTH: When applying for a mortgage you will be punished for your spending patterns
BUSTED: While your statements will be reviewed when applying for a mortgage you will not be punished for the odd splurge.
What’s important to mortgage lenders is that you’re able to recover from large instances of spending and tighten the purse strings to show a consistent pattern of saving.
MYTH: Banks won’t approve single people for mortgages.
BUSTED: When applying for a mortgage what the mortgage provider is looking for is your ability to make repayments so they’ll be looking at your accounts and loan records only.
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.
MYTH: You need to have a property chosen before you apply for a mortgage.
BUSTED: You do not need to have chosen a property before you submit your mortgage application.
Once you receive approval in principle this approval will last for 6 months, allowing you to start your house-hunting journey with confidence.
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