Common mortgage misconceptions

20th July 2022

Common mortgage misconceptions

Buying your first home and getting a foot on the property ladder can be a really exciting time.

It is very important that you have the correct information and are aware of all the options available to you.

There are many myths out there when it comes to mortgages, for example, a lot of people don’t know how many options there are for those who are self employed or for those with poor credit history.


The truth: it is a common misunderstanding that you need tens of thousands of pounds for a deposit when you are applying for a mortgage. With the current average house price in the UK being £281,000 (as of April 2022) a deposit of 10% will be £28,100!

For many saving this amount of money seems like an unrealistic goal and can put a lot of first-time buyers off. However, there are schemes in place that can make this figure a lot less daunting.

For example, the shared ownership scheme.

This is when you buy a share of a property. You will need to arrange and pay for the mortgage on the share of the property that you buy, for the remaining share of the property, you will pay rent.

If we look at the average property price in the UK (£281,00), and for example purchase a 50% share of this. You will be purchasing 50% of this property for £140,500 and be required to put down a 5% deposit.

This will mean you need a deposit of £7025!


The truth: it is a common misconception that securing a mortgage with your current bank means you will be offered the best deals and that it is the easiest option.

This is untrue, often banks will advertise rates that they have available for their customers, however, these rates come with a long list of criteria and will only be available to the ‘ideal’ borrower.

When it comes to applying for a mortgage it is best to explore all your options, from other high street lenders to specialist lenders.

Your mortgage lender shouldn’t just be based on rate, you need to consider who can lend the full amount you require, if needed would they accept a quirky property, or do you need a lender better suited to lend based on your financial situation.

Once you have a list of lenders who can help, then you can start the search for the best products!

Clients who have subprime credit run into these problems all the time, high street banks have a very low tolerance for adverse credit, however, specialist lenders may be able to accept borrowers with a poor credit history or a lower than average credit score.

Speaking to a comprehensive mortgage advisor will ensure that you have explored all of your options and will have access to a wide range of the mortgage products on the market, regardless of your buying situation, this is always the recommended first steps to securing your dream mortgage.


The truth: it is true that having poor credit history can affect the process of securing a mortgage. Although you may have limited options, it is still possible.

Whether or not you’ll be able to get a mortgage and the rate you pay will depend upon the severity of your credit issues, as well as how recent they were. But just because you have bad credit issues, doesn’t mean you can’t get a mortgage.

When speaking with a specialist advisor, they will be able to explore all mortgage products on the available market, to ensure you secure the best deal with a lender who will actually say yes.

Your credit score will thank you too as you won’t be getting credit searched with every lender you apply to, instead you get placed with the right lender, first time.

MYTH: You don’t need to think about mortgages until you have found a property.

The truth: It is true that you don’t need to apply for a mortgage when searching for your dream property.

However, if you are starting the property search, it is important to know what you can afford and if you can get a mortgage at all.

By speaking to a broker before starting your property search you will not only gain a realistic idea of what you can afford to buy, but you will also get peace of mind that there are lenders who will lend to your situation.

You will also be able to get a Decision in Principle (DIP). This is a document that acts as an indication from your mortgage lender of how much they may be willing to lend you for your mortgage. It will show your affordability and give you a good indication of what you will be able to buy, a lot of estate agents will want to see this document as a form of proof that you are serious about purchasing a property.

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