Mortgage Squared like to debunk myths and help to educate the masses about misconceptions within the mortgage industry. It can very be frustrating when you are hearing so many different views on the huge world of mortgages. No wonder it puts people off even trying.
Our bigger plan for Mortgage Squared is to educate WITHOUT jargon. We want to make the mortgage process easier to understand no matter what your background.
We feel that knowing the in’s and outs of what getting a mortgage actually means for you. Ironing out those myths that seem to be flying around will give you the ability to put your best foot forward and get yourself onto the property ladder.
What non-homeowners know about mortgages matters because it could potentially change their views and enable them to realise they can in fact get a mortgage.
A lot of people shy away from learning about mortgages because it can be a mine field of information and it will change for everyone due to their circumstances. Here are a few myths that we found and wanted to put straight.
Borrowing and earnings
“I can borrow up to ten times my income when taking out a mortgage”
Nope, not true. Some lenders might consider between four to six times an applicant’s income, but many other factors will also be taken into account when assessing affordability.
How much you earn, whether it is a joint application, how much deposit you can put down, whether you have any outstanding debts – will all be considered.
“If I have any debts, I can’t get a mortgage”
Yes you can still apply for a mortgage however lenders will take your existing credit commitments into consideration with working out how much they will lend. Payments to things such as hire purchase, personal loans and credit card balances can all potentially reduce the amount you can borrow. Even if you are planning to pay off the debt prior to the mortgage some lenders will require this to be done and evidenced prior to the star of the mortgage. Others may add a condition to the mortgage offer for the solicitors to in force.
Using a broker
“Why use a broker when I can do it myself”
By all means try it yourself. It is all down to personal choice but what I will say is that having the support and guidance of a broker can be the difference between a hell of a lot of stress and upset to a smooth mortgage process. And lots of smiles.
Exchange and completion
“Exchange means handing over the keys”
Completion is where the solicitors swap signed contracts. This means that a date for completion has been agreed between you and the seller (if you are purchasing) or between you and the buyer (if you are selling).
Important to note: from the date of exchange you become you become liable for the property and therefore will need buildings insurance from this date. It is also highly recommended that you put any other protection policies such as life insurance, critical illness cover and income protection, in force from this date.
The completion date has been inserted into your contract and becomes your official moving day.
Jargon, jargon and more jargon…
“I don’t understand the process”
Some of the jargon used by some lenders/brokers/people and that are not backed up with what they mean, can be very confusing.
Even when you try looking up the meaning of something you have heard about mortgages you can be flung into a world of abbreviations and mortgage talk that would be enough to put anyone off.
Mortgage Squared pride ourselves on taking this stress away from you. You don’t need to know the jargon; we make sure you only need to know what applies to you and your mortgage.
If there is something that you are unsure of, we will explain it to you in its simplest form. That way you don’t get discouraged about the process and you more importantly, you understand the process.
“If I buy my first home, I will be slapped with a huge stamp duty fee”
There are going to be lots more myths that are floating around and putting people off getting a mortgage. But these were the most popular.
We hope you enjoyed this blog. If you do want to talk to one of our advisors, then please call 01202 313 182
Or request a call back HERE