Mortgages for anyone can be confusing, especially for young people or first time home-buyers. There are several common misconceptions or myths when talking about mortgages. Here we will set the record straight and bust those mortgage myths.
It is NOT true that you have to be an existing member of a bank to get approved for a mortgage. Mortgage applications are assessed on a case to case basis. Being established at a bank already does not affect the outcome or make you more or less likely to get approved. Existing members also do NOT get better agreements.
Having evidence of gambling will NOT exclude you from being able to get you a mortgage. Having several transactions to online gambling websites may raise some concerns to lenders but occasional transactions will not strike your eligibility and will not be held against you.
It is NOT impossible to get a mortgage if you’re self-employed. Many people think if you’re self employed it is challenging to get a mortgage and a home. Being self-employed does not exclude you from being approved from getting a mortgage. As long as you have proper documents you are just as likely to get approved as other applicants.
Rent is usually NOT cheaper than buying. This one can get a little tricky. Typically, people assume renting is more affordable than buying, however this is usually not true in the long run. Mortgage payments can be cheaper than rent. The money you spend paying rent you will never get back while buying a home is an investment and people usually make a profit when selling their home.
You do NOT always have to provide a 20% deposit. In some cases, first time home-buyers are eligible for mortgages up to 90% of the home value. This means they only need to save up 10% for the deposit.
You can NOT be punished for how you spend your money when applying for a mortgage. While your financial statements and transactions will be reviewed, you will not be punished for odd purchases or splurges. As long as you make payments on time and recover financially after large spendings, your statements should not negatively affect your mortgage approval.
Banks will approve you even if you are single. Another misconception is that you have to have 2 people or dual income to get approved for a good mortgage agreement. This is not true. The bank is not so much looking at your marital status but more so your ability to make payments and looking at your loan records and accounts. Your relationship status has nothing to do with your approval for a mortgage and will not be taken into account.
You do NOT need to have your property chosen before applying for a mortgage. Many people think you need to have a home picked out before you should apply for a mortgage. This is not true. Once you apply and receive approval, this approval will last for 6 months which then allows you to start your search for a home.
Navigating mortgages, seeking mortgage approval, house-hunting, and buying your first home are all challenging and difficult to navigate. Educating yourself on the truth and the facts about mortgages and home-buying will hopefully set the record straight and make the process easier and go smoothly.
