Purchasing a home is exciting yet complicated. Myths about mortgages often circulate, causing confusion and fear for homebuyers. This article aims to dispel those myths with facts from experts to empower you with accurate information. Our goal is to equip homebuyers to make informed decisions throughout the home-buying process.
By debunking these common myths, we provide valuable insights to streamline your home-buying journey and set you on the path to successful homeownership. We’ll tackle misconceptions about credit scores, deposits, and home inspections to replace confusion with practical guidance.
4 Common Mortgage Myths — Debunked
Myth 1: You Should Have a Perfect Credit Score
You don’t need flawless credit to qualify for a mortgage. While a good credit score helps, lenders weigh many factors, including income, expenses, assets, history, loan type, and deposit. A reputable mortgage professional can explain requirements to qualify and help you understand how your credit score impacts options.
Myth 2: You Must have a 20% Deposit
You don’t need a 20% deposit. Many first-time buyers put a deposit of around 5%. However, less than 20% deposit means a larger mortgage and higher monthly payments. There are several Government schemes that can help you if you have a low deposit. An experienced mortgage broker can review your finances and guide you in choosing the best mortgage option to qualify for your dream home.
Myth 3: Mortgage Payments Cost More Than Rent
Mortgage payments often cost less than rent. Rent includes profit for the owner, but mortgage payments build home equity. With the right home purchase price and mortgage, payments frequently cost less than former rent.
Myth 4: You Can Only Get a Mortgage From Your Current Bank
You can get a mortgage from any reputable lender, not just your bank. While your bank may offer deals, you aren’t obligated to use them. Compare options from multiple lenders and work with a broker to find the best rates and terms.
A mortgage broker provides expertise to guide your home loan search:
– Access to diverse lenders and loan products
– Individualise guidance based on your financial situation
– Streamlined process by submitting your application to multiple lenders
– Support throughout the entire mortgage process