Alex Sharp of GAM Home Loan Specialists debunks eight common myths around mortgages.

When it comes to getting a mortgage, there's a lot of misinformation out there.

Don't let these myths stop you from securing the best deal for your home! Here are some of the biggest mortgage myths debunked:

Myth 1: You Need a 20% Deposit

Many believe that a 20% deposit is essential to securing a mortgage.

However, this is not the case.

Many lenders offer mortgages with as little as a 5% deposit!

There are also government schemes available to help first-time buyers get on the property ladder with even lower upfront costs.

'Don't let these myths stop you from securing the best deal for your home' (image supplied)

Myth 2: Mortgage Rates Always Follow the Bank of England Base Rate

Many assume that mortgage rates directly track the Bank of England base rate, but this isn't always the case.

While some tracker mortgages move in line with the base rate, fixed-rate mortgages remain unchanged for the agreed period.

When the Bank of England reduces the base rate by 0.25%, this does not mean that mortgage lenders instantly reduce their rates by 0.25% too.

Myth 3: You Must Have a Perfect Credit Score

While a good credit score can help secure better rates, it is not the only factor lenders consider.

Many lenders offer mortgage products designed for those with less-than-perfect credit.

Factors such as income, employment history, and existing financial commitments all play a role in mortgage approval.

GAM Home Loan Specialists is run by Gary (left) and Alex Sharp (image supplied)

Myth 4: The Best Deals Are from Your Bank

It's a common misconception that your bank will always provide the best mortgage rates.

In reality, banks can only offer their own products, while mortgage brokers have access to a wider range of deals, some of which may be exclusive and better suited to your financial situation.

Myth 5: Self-Employed People Can't Get a Mortgage

Self-employed individuals can absolutely qualify for a mortgage!

The key is proving a steady and reliable income. Lenders typically require at least two years' worth of accounts or tax returns to assess financial stability, but with the right documentation, self-employed applicants can secure competitive mortgage deals.

Myth 6: You Can't Get a Mortgage if You're Over 50

Age is a factor in mortgage approval, but it does not automatically disqualify older borrowers.

Many lenders offer products specifically designed for those over 50, including retirement interest-only mortgages and later-life lending solutions.

The key is demonstrating affordability and a suitable repayment plan.

Contact GAM HLS to discuss your mortgage! (image via Julie Philpot)

Myth 7: You Need to Wait Until You've Found a Property to Look for a Mortgage

Getting a mortgage offer in principle before finding a property can actually work to your advantage.

This agreement from a lender outlines how much they are willing to lend based on your financial situation, making you a more attractive buyer to sellers and giving you a clear budget to work with.

Myth 8: Gambling Transactions Will Automatically Disqualify You from a Mortgage

While regular gambling transactions might raise red flags for lenders, occasional, responsible gambling does not necessarily prevent mortgage approval.

Lenders are more concerned with overall financial stability, debt management, and consistent income rather than isolated transactions.

Final Thoughts

Understanding the truth behind these mortgage myths can help you make informed decisions and navigate the mortgage process with confidence.

If you have any questions or need expert advice, feel free to reach out!

Your home may be repossessed if you do not keep up repayments on your mortgage.

GAM HLS sponsors Nub News. Without community-minded partners like them, we would not be able to bring clickbait-free news to the people of Warwickshire.