1. You have to have a perfect credit score
While it's true that having a good credit score can make it easier to secure a mortgage, having bad credit doesn't automatically disqualify you.
The impact of bad credit depends on the specific issues listed in your credit report, when they occurred, and how significant they were.
The lender you choose plays a crucial role in your mortgage application.
Some lenders have programmes that look beyond credit checks and evaluate applicants on a personal basis. If you're unsure about where to start, consulting a mortgage adviser can help you find these lenders and better your chances of obtaining a mortgage.
At Hello Mortgage, our experienced advisers specialise in assisting those with bad credit. We have access to lenders for nearly every financial situation, so if your credit score is less than ideal, there's still hope. Let us guide you through the next steps.
You can't get a mortgage if you are self-employed
Being self-employed can make getting a mortgage a little more difficult because your income can change significantly from year to year, and many mortgage lenders don't like the variation this creates in the paperwork.
If you don't have a stable 9 to 5 with three months' worth of steady payslips, many lenders see the file as complex and try their best to avoid self-employed people. However, there is a market of lenders that are happy to deal with the more complicated cases of self-employed mortgage borrowers.
To find these lenders and get the right mortgage for you, it is widely advised that self-employed people seek mortgage advice to help match them with the correct lender.
A lower interest rate will mean a cheaper mortgage
Interest rates are always changing, and many people think that having a lower interest rate automatically makes their mortgage cheaper. In reality, many factors go into determining the monthly repayments of your mortgage, not just the interest rate and value of the property.
For example, the two most common types of mortgage available are fixed-rate mortgages and variable-rate mortgages, and each option affects your monthly repayments differently.
A variable-rate mortgage relies on the current interest rate, meaning it can change over time, whereas a fixed-rate mortgage is a set amount every month over a set number of years. The length of your mortgage can also have a big impact on your repayments; shorter terms mean higher monthly payments.
You may also have higher fees to pay, as fees often rise for cheaper mortgages. All this and more is why it is so important to do your research and shop around before making a final decision.
Shopping around for mortgages can hurt your credit score
This myth stems from the fact that every time you make a mortgage application, it is recorded on your credit report.
However, shopping around for the best interest rates does not mean you need to submit a mortgage application each time. With Hello Mortgage, we can assess your situation and advise on how much you can borrow and the best options for you without you having to lift a finger.
Alternatively, if you prefer, you can research the various options available and explore the mortgage market yourself using calculators to determine how much you could borrow at any given time.
Young people can't get on the property ladder
The notion that young people can't get on the property ladder unless a deposit is gifted to them is a common misunderstanding. It has been a hot-button topic for quite some time nationally, as more and more young people get stuck in a renting cycle where they can't save because of the rising rental market across the country.
However, some schemes are in place to help young people become homeowners. For those stuck in a renting cycle and unable to save, there are schemes that use your rental history to support mortgage eligibility, or rent-to-buy schemes where you rent a property for a period before purchasing it at a fraction of the original price, with rental payments taken into account.
Another option for some first-time buyers could be a 100% mortgage, which is available in limited circumstances. This type of mortgage means you would not need to provide a deposit; however, you would start with no equity in the property. It's important to be aware that if property prices fall, you could owe more than your home is worth.
Lenders such as Skipton Building Society have offered this type of product at the time of writing, although eligibility and availability depend on individual circumstances and lending criteria. Typically, these mortgages are capped at around 4.5 times your annual income, but this can vary.
There is also a lot more parents can do beyond simply gifting a deposit to help young people purchase a home. To find out more about the methods available for family and friends to support you with a mortgage, click here.
Mortgage products and criteria are subject to change. Always seek advice from a qualified mortgage adviser before applying.
There's no point looking into a mortgage until you have found your property
This myth may seem to make sense on paper, but in reality, most people have a budget in mind that they don't want to exceed. You can speak to a mortgage lender and obtain a mortgage in principle, which can later be adjusted to suit the property you eventually choose.
Having a mortgage in principle can also speed up the process, as initial checks on your credit history and affordability will already have been carried out.
Final thoughts
Mortgage myths can make the process feel daunting, but the reality is often far more positive than people expect. With the right advice and access to lenders who understand different circumstances, homeownership can be more achievable than you think.
At Hello Mortgage, we're here to cut through the confusion, explain your options clearly and support you every step of the way. Whether you're worried about credit, self-employment, deposits or just where to start, our advisers can help you find the right path.
If you're ready to explore your options, get in touch with our friendly team today.
or give us a call on 0800 292 2557
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