Common Mortgage Misconceptions
Getting a mortgage can feel like you need to speak another language. Type ‘apply for a mortgage’ into google and you are hits with thousands of results leaving you feeling overloaded and struggling to see the leaves from the trees. Below are common mortgage myths and the truth (or lack of) behind them.
If you have a bad credit rating, you can’t get a mortgage.
There is a bit of truth to this one. However, whilst a poor credit score can make it more difficult when applying for a mortgage it doesn’t mean it’s impossible. Whether or not you’ll be able to get a mortgage depends on the severity of your credit issues and how recent they were. Speak to a mortgage broker to get specialist advice if you think your credit score is low.
You can’t get a mortgage if you’re self-employed.
Again, whilst being self-employed can make it more difficult to get a mortgage, it is by no means impossible. Make sure you have your financial records in good order before approaching a mortgage lender and explaining your situation.
A lower mortgage rate will mean a cheaper mortgage.
A lower mortgage rate sounds ideal, however there are many factors that need to be considered. Look at the agreed length of your mortgage as this will impact how much you pay back each month.
Checking out multiple lenders will hurt your credit score.
This one is nonsense, lenders understand you will commit to one mortgage even if you make multiple enquiries. These enquiries will likely be made over a short period of time so it will be obvious they are in relation to the same mortgage application.
You must wait until you’ve found a property before looking into a mortgage.
In fact, getting a ‘mortgage in principle’ can make it easier to have an offer accepted on a property when you do find one you want. A ‘mortgage in principle’ is a document from a lender which state ‘in principle’ that they’d be happy to lend you the money.
Speak to multiple lenders to gain the best advice and only commit to a mortgage you are happy with.
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