Mortgages – The Urban Myths

Posted: 30^th April 2018

By: Clare Elizabeth Eaton

I hear the following on a very regular basis and here I will dispel the myths and hopefully help you on your mortgage journey, either with buying a first property, moving to a new house, buying another property or changing your finances.

• Need 5 years accounts – most lenders only need 2, some only
• Need perfect credit history – not true, providing us with a copy of your credit file, such as Noddle, will help the broker understand where the impairments are, and therefore which lender we can use
• Not possible if you’re agency or a piece worker – some lenders will look at this situation, proof of income such as contracts and payslips will help the broker find the right lender faster
• Not possible if only 1 person in the couple is working – some lenders are happy to accept a mortgage in one person’s name if it is only them working, or the other person falls out of all lending criteria
• Need at least a 10% deposit – some lenders will accept a 5% deposit
• How much you borrow is based on income multiples – not anymore! It’s all based on affordability once incomes and expenditure have been considered. Each lender will have its own criteria on what they will or won’t take into consideration, so the more information you can give your broker, the faster they will find the right lender
• A family member has been declined – it’s the reason they were declined that matters, the property, its location, surroundings, type of income and expenditure can all impact on a decision, as well as credit history. The more honest you are, the easier it is to find the right lender.
• Need to wait for the current deal to come to an end before borrowing more money – depending on the lender, how much is required and its purpose can all affect whether your broker will go direct to your current provider, approach a new provider or consider an alternative form of lending such as a second charge. There are plenty of options for us to explore.
• If I don’t tell them about my impaired credit, it won’t matter – it really does! Trying to hide an issue can lead to disastrous consequences, the more honest you are enables your broker to find a lender who will consider your situation and enable to transaction to proceed more quickly and successfully.
• A mortgage must be paid off before intended or state retirement age – not necessarily. Much of this depends on what income you will receive, how long for, what your job role is and will be.

Please feel free to contact me on 01332 300300 or clare@mortgageandfinancearena.co.uk with any questions and scenarios you may have, we can talk you through your needs and help you reach your goals.