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We live in a world of Fake News– just scroll through your social media feed and there is bound to be something there… whether it is that drinking a Corona can spread the Corona Virus or that Vaping makes you look really cool! 

Trying to decipher the truth from the facts is not always quite this straightforward. 

To help eliminate the fake news about mortgages here are some things we get hear nearly every day that simply aren’t true!

 

FAKE NEWS 1

You need at least £10k to buy a house!

The deposit you need to buy a house is often described as a percentage of the cost of the purchase. Deposits may be as little as 5% or 10% of the purchase cost (a 10% deposit on a £65k house is on £6,500). 

Co-ownership is another option available which enables the purchaser to buy a house with £0 deposit – that’s right, no deposit! 

Like with every mortgage, there are certain criteria that are applicable and not every mortgage is the right deal for you, 

Truth: There are a huge variety of options available across the whole of the market. Don’t write yourself off just because you don’t have £10k saved.

FAKE NEWS 2

I forgot to pay my Store Card when I was 20 and now I have a bad credit score so can’t get a mortgage!

Getting a mortgage can be difficult if you’ve got a poor credit score, but it’s not impossible and more importantly – your credit score can be repaired!  

Knowing what your credit score is and putting a plan in place to improve it is a great way to take some positive steps in the direction of home ownership. There are a number of steps e.g. registering to vote, paying off any debts and closing unused store cards. These can help repair a poor credit score.

Truth: A poor credit score may reduce the number of options available to you but it can be improved and doesn’t automatically rule you out.

FAKE NEWS 3

Find the house of your dreams then start to think about a mortgage once you have an offer accepted on it. 

Once you decide you’d like to buy a house, one of the first things you should do is make an appointment with your mortgage broker to determine what you can afford. 

Your affordability will be determined by your income(s) and your expenses (loans, dependents, bills, etc). It will also be stress tested to ensure you will still be able to afford it if circumstances change. 

Your mortgage broker should be able to supply you with an ‘agreement in principle’ (AIP) from a lender stating they would, in principle, lend you a certain amount of money.

Then it’s time to find the house of your dreams knowing your limitations! 

Truth – Get in touch with a mortgage broker as soon as you can – it helps manage expectations and makes the process more streamlined.

FAKE NEWS 4

You can only get a mortgage from your current bank 

Your bank will likely encourage you to use them for your mortgage and may even offer a preferential rate to you as an existing customer but may only have 5-10 mortgages available of which maybe only 2 or 3 will be available to you. 

A mortgage broker however may have access to 80+ lenders across the market. You’d be crazy not to explore what other options might be there.  A quality mortgage broker will have access to hundreds of mortgages and will be able to recommend a mortgage that is the best deal available for you – not just the best of the deals they have. 

Truth – An independent broker will offer a wider range of options and ensure you get the best deal available.

FAKE NEWS 5

The Lowest interest rate = cheapest mortgage 

The interest rate you’ll pay is just one of several factors influencing the overall cost of a mortgage.  If your mortgage is tracker mortgage (linked to the Bank of England base rate), it can change the cost of your payments during your deal. 

The duration of the mortgage will also have an impact- taking a repayment mortgage out over 30 years will provide cheaper monthly repayments than a mortgage taken out over 15 years but in the long run you will pay more money over the 30 year mortgage.

A mortgage may carry fees ranging up to and above £1,000, while others offer cash back incentives. A cash back may be a welcome boost but does not always equate to being the best or cheapest deal.

Truth – A quality mortgage broker will be able to help you navigate this potential minefield and ensure you get the deal that is best for you over the term that is best for you.

 

 

As you can see, there is a lot of Fake News that serves to discount you from buying a house.

If you answer ‘Yes’ to the following question – we’d like to offer you a FREE appointment to see if you could be eligible for a mortgage

Are you currently employed or self employed?

If you answered ‘yes’,  call or email us to book your FREE appointment!