Common Mortgage Myths
When looking for your first mortgage, there is lots of jargon and misconceptions floating around that you need to navigate. Here, we dispel the most common mortgage myths.
1) You can't get a mortgage if you have a poor credit score.
This is probably the most common misconception when it comes to mortgages. Whilst having a better credit score means you are not only more likely to be accepted, and that you will pay a lower amount of interest, saving you money in the long run, it is not game over in the long run if your credit score is not spotless.
We do recommend you get your credit score as high as possible before applying for a mortgage, and as this is a slow process, you should probably start several years before you are looking to buy your first house.
2) You can't get a mortgage if you have debt.
Most people applying for a mortgage will have at least some debt, be it car payments, student load or credit cards. As long as your debt-to-income ratio is low enough, lenders will still see that you will be able to repay your mortgage.
If your debt-to-income ratio is too high, it's best to pay down the debt or increase your income before applying for a mortgage. One of our advisers can run you through which would have the highest impact in your situation. Get in touch here.
3) The lower the interest rate, the better the mortgage.
The interest rate is one of the biggest factors that will affect how much your mortgage will cost you. However, there are other factors that may mean the mortgage with the lowest interest rate would not necessarily be the best mortgage for you.
Other things to look out for are: type of deal (variable vs fixed rate), the term of your mortgage, fees (either from your mortgage adviser or from your lender), and cashback (some lenders provide cashback on the onset of your mortgage to help with moving costs).
Any good mortgage adviser should be able to run you through the pros and cons of each mortgage offered - you can speak to one of Mortgagebud's advisers for free, today.