If you're planning to buy your first home, you've probably come across plenty of information about mortgages, deposits and affordability. While some of it may be helpful, some common misconceptions can make the process seem more complicated or out of reach than it really is.
Here are five common mortgage myths that could be creating unnecessary uncertainty if you’re an aspiring first-time buyer.
1. "I need a huge deposit"
A common misconception is that you need a 20% deposit before you can start looking for a home. In reality, some lenders offer mortgages with deposits as low as 5%,* meaning you may be able to buy sooner than you think. While a larger deposit can unlock more mortgage options and potentially lower rates, it isn't always essential to get started.
2. "I can only borrow four times my salary"
Borrowing limits aren't always as straightforward as a simple salary multiplier. Lenders usually consider a range of factors, including your income, outgoings, existing financial commitments and overall affordability. The amount you may be able to borrow will depend on your individual circumstances and a lender's criteria. This is why speaking to an adviser early can be so valuable.
3. "My credit score has to be perfect"
It's often assumed that a missed payment on your credit record will automatically prevent you from securing a mortgage. While lenders do review your credit history, perfection isn't always required. Different lenders have different criteria and may take varying views on past credit issues. Understanding your position early can help you identify any steps that could strengthen your application before you apply. You can check your credit report using our partner service, Checkmyfile.**
4. "I should wait until I've found a property"
Seeking mortgage advice early in the home-buying process can help you understand your budget, the mortgage options available to you and any steps you may need to take before applying. Having a clearer understanding of your position before you begin your property search may also help you focus on homes within your budget and move more confidently when you find a property you'd like to buy. Organising an Agreement in Principle may also demonstrate to sellers that you're a serious buyer.
5. "Buying a home is impossible for my generation"
With rising living costs and higher property prices, it's understandable that some younger buyers might feel homeownership is out of reach. However, there are a variety of routes that may help some buyers achieve homeownership, including careful saving, family support, shared ownership schemes and low-deposit mortgages. The most important step is understanding your own options rather than assuming homeownership isn't achievable.
Buying your first home can feel overwhelming, particularly when there's so much conflicting information available. Separating fact from fiction is often the first step towards building a realistic plan. Speaking to an adviser can help you understand what may be possible based on your individual circumstances and give you the confidence to take the next step on your homeownership journey.
Call us today on 08000 38 37 36 to arrange your free mortgage appointment.
This is for information only. Products and rates vary depending on your circumstances, lender criteria and products available at the time.
* Twenty7Tec
** Checkmyfile is one of our carefully selected group of third-party specialists
