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BELFAST, CITY CENTRE: 028 9013 7392
BELFAST, EAST OFFICE: 028 9560 9410
BELFAST, ORMEAU ROAD: 028 9521 9349
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DROMORE: 028 9210 6060
LISBURN: 028 9279 4300
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COALISLAND: 075 6180 7334

Debunking Common Mortgage Myths

by | Jan 17, 2024 | Uncategorized | 0 comments

Let’s face it, we understand at The Mortgage Clinic in Lisburn that diving into the world of mortgages can feel like navigating a maze blindfolded – it’s tricky, a bit nerve-wracking, and full of twists and turns. What makes it even more challenging? All those pesky myths and tall tales about mortgages that seem to pop up everywhere, thanks to the media and some ‘experts’ who love to share their two cents.

But here’s the good news, we’re about to bust those myths wide open. In this guide, we’re going to sort fact from fiction so that you can step into your mortgage adventure with eyes wide open and a sense of sure-footed confidence. Ready to find that dream mortgage?

Busting the Myths, One Truth at a Time:

1. “Your Bank is Your Mortgage BFF?”

Think your bank is the go-to place for snagging a great mortgage? Hold up – let’s unpack this. You might have noticed that your bank seems really keen on getting you to mortgage with them, especially if you’ve already got an account. They might even dangle some ‘exclusive’ deals in front of you. And it’s easy to think, “Hey, they already know me, so getting a mortgage here should be a breeze, right?”

Well, not exactly. The idea that your bank will roll out the red carpet for you, just because you’re a customer, is more marketing magic than reality. Don’t fall for the myth that your chances of getting a mortgage are higher with your current bank, it’s simply not true.

Here’s a thought, why not come to us at The Mortgage Clinic in Lisburn? Picture our mortgage broker as your personal mortgage detective, unearthing options that might have been off your radar and finding that lender who’s just right for you.

2. “Wait for the Perfect Property Before Thinking of Mortgages?”

Now, here’s a myth that’s as sticky as bubblegum on a hot sidewalk – the idea that you should first find your dream home before even peeking at mortgage options. It sounds logical, right? Find your castle and then figure out how to pay for it. But, oh boy, is this approach a gamble.

If you’ve ever seen someone scrambling to secure a mortgage after setting their heart on a property, you know it’s nail-biting. It’s more stress and crossed fingers than you’d want.

Flip the script. Look for your mortgage first. This way, you’ll know exactly what you can borrow, which lenders are your best pals, and you can hunt for a house that fits your budget like a glove.

3. “The Property Ladder is a ‘No-Go’ Zone for the Young”

Let’s tackle this head-on: stepping onto the property ladder as a young person isn’t a walk in the park. But it’s not an impossible dream either. Yes, as we grow older and our piggy banks get heavier, snagging a mortgage gets a bit easier. But being young in the mortgage world has its perks too.

Older borrowers might find themselves wrestling with shorter mortgage terms and heftier monthly payments. In contrast, as a young’un, you might enjoy more breathing room with your repayments.

Don’t forget about those nifty government schemes and incentives like the First Homes Scheme or the stamp duty cuts for first-time buyers. They’re like a welcome hug for young homebuyers.

The big hurdle? That pesky deposit. In today’s U.K. economy, scraping together even 5% for a deposit feels like climbing Mount Everest. That’s why many young buyers team up with a partner.

4. “Mortgages and the Self-Employed: A Mismatch?”

Here’s a myth that’s been floating around: If you’re self-employed, you might as well forget about getting a mortgage. But hold on, let’s bust this myth with a dose of reality.

Sure, being your own boss means the mortgage road might have a few more twists. For instance, if your business is younger than a year, lenders might give you the ‘not yet’ signal. Why? They want to see income that’s been through the tax wringer with HMRC. Since self-employed folks pay taxes after their annual accounts are out, there’s a bit of a waiting game involved.

But here’s the kicker, some lenders are totally cool with just one year of accounts. While many still ask for two, it’s not the universal rule. So, if you’ve been doing your thing for a year or more, you’ve got options.

There are lenders out there who’ve crafted mortgages with self-employed people in mind. And guess what? Some might even let you use your company accounts to show your income or agree to a deal based on just one year’s worth of accounts.

5. “Lowest Interest Rate Equals Best Mortgage”

Ah, the allure of low-interest rates – like a siren’s song for borrowers. It’s tempting to think the mortgage with the lowest interest rate is the best of all mortgages. But hold your horses, it’s not always about scoring the lowest rate.

Here’s why: Some mortgages with super low rates come with a side of hefty Early Repayment Charges. Think of it like this; you’re getting a discount upfront, but if you need to bow out early, the exit fee can be a real wallet-buster. If you’re planning to move houses soon, a mortgage like this could end up costing you more in the long run.

Mortgages are like puzzles – you need to see the whole picture. It’s not just about the rate; it’s about all the pieces fitting together for your specific situation. That’s where a mortgage broker becomes your personal mortgage wizard, finding not just the cheapest option, but the right one for you.

6. “You Need a Hefty Deposit for a Mortgage”

Once upon a time, you needed a big old deposit to even get a foot in the mortgage door. But times have changed, and so have mortgages. Now, you might only need to muster up as little as 5% of the purchase price. It’s like the mortgage world has gone on a diet and slimmed down the deposit size.

But remember, it’s not just about scraping together that 5%. You’ve got to be able to swing the remaining 95% of the mortgage. It’s like balancing a seesaw – you need the right amount on both sides to make it work.

7. “Only Spotless Credit Scores Welcome”

Here’s a reality check: your credit score doesn’t have to be as flawless as a diamond to get a mortgage. Sure, if your credit history has a few blemishes, you might not get the rock-bottom interest rates. But don’t throw in the towel just yet.

There’s a whole parade of lenders out there who specialise in mortgages for folks with less-than-perfect credit. Yeah, the interest rates might be a tad higher, it’s their way of saying, “We’re taking a chance on you.” But if you’re determined to climb onto the property ladder, these lenders could be your ticket.

8. “Renting Beats Buying Any Day”

Let’s tackle this one: Is renting always the smarter move? Well, it’s not a one-size-fits-all answer. The private rental and mortgage markets do a dance with national interest rates. When rates are sky-high, mortgages can feel like a heavyweight on your budget compared to renting. But when rates are low, the cost difference between renting and paying a mortgage can get really cozy.

But here’s the cherry on top for mortgages: Over time, your mortgage payments shrink as you chip away at the loan. Rent, on the other hand, tends to play leapfrog, it usually jumps up, not down. With every mortgage payment, you’re building equity in your home.

9. “Speak to a Specialist at The Mortgage Clinic in Lisburn – It’s a Game Changer!”

Alright, let’s wrap this up with something crucial: talking to a mortgage specialist. Here at The Mortgage Clinic in Lisburn, we’re not just about giving advice; we’re about giving advice that makes sense for you. And guess what? Our initial chat won’t cost you a penny. We’re here to help you navigate through the maze of mortgages, address any questions or concerns, and make sure you’re armed with all the info you need.

So, why not give us a shout? Booking your mortgage consultation with us here at The Mortgage Clinic in Lisburn is like taking the first step on a path to a mortgage that fits you like a glove. Whether you’re battling myths, crunching numbers, or just starting out and feeling a bit lost, we’ve got your back. Remember, every myth we busted today is a step closer to making informed decisions that lead you to your dream home. Ready to start this adventure? Contact The Mortgage Clinic in Lisburn and book your free mortgage consultation.

Helmut Elstner

Managing Director – Independent Mortgage Broker and Insurance Advisor

Helmut started working in financial services in early 2012 and founded The Mortgage Clinic in Belfast in early 2015. He specialises in all types of mortgages from First Time Buyer, Co-ownership, Self Build, Home Movers, Remortgages, Debt consolidation, to Buy to Let.

Three Best Rated Winner 2021
Winner Mortgage Broker of the year 2020
Top Rated Advisor 2021 on Vouchedfor