Prominent property developer, Barratt Homes, is attempting to bust myths surrounding buying a property and obtaining a mortgage in a new partnership with TORC24 mortgage specialists.
In partnership with TORC24, a personalised mortgage specialist for the new homes industry, Barratt Homes’ Southampton division – which is bringing new homes to the Isle of Wight – has published 5 common misconceptions about getting a mortgage.
The partnership has gathered and ‘mythbusted’ several of the common myths circulating around the topic of homeownership.
Myth 1: Buyers cannot qualify for a mortgage if self-employed or on furlough
Myth busted – Mortgage companies are still accepting applications even if you are currently on furlough. As for self-employment mortgages, these are also available – even though your business may have slowed down during the pandemic. If your business deals with large amounts of cash, make sure it goes straight into the bank. Many have been tempted to avoid going to the bank during Coronavirus, but lenders will want to see your business is still trading with plenty of cash going through.
Myth 2: You can’t buy a house if you have bad credit
Myth busted – there is a lender out there for everyone. Credit card debt and loans are commonplace nowadays and as long as it is affordable and managed, there is no reason why you would not be able to get a mortgage. There are even companies out there lending to those who have been bankrupt – so all is not lost.
Myth 3: It’s impossible to buy a property alone
Myth busted – You can opt for something called a “sole proprietor mortgage”. This is where your property is held in one name, but another person, such as a parent, could provide a joint name on your mortgage. One thing to note is that if you’re planning on taking advantage of government schemes, such as Help to Buy, you may not be eligible for a sole proprietor mortgage – so it is best to check with your lender.
Myth 4: My existing bank is the best place to go for mortgage advice
Myth busted – If you have been to an appointment with a lender and they have either turned you away or have offered you less than you wanted, try a broker or a lender that specialises in new builds, or Help to Buy. There is no one-size-fits-all model when it comes to lenders and the products they have on offer – so don’t feel deflated, try somewhere else.
Myth 5: If you have a gym membership, you won’t get a mortgage
Myth busted – This sort of headline was commonplace in the early 2010s when the law changed surrounding mortgage affordability post-recession. Whilst spring cleaning your finances is always a good idea – i.e. regularly checking for any unnecessary direct debits – having gym memberships or anything else is unlikely to have a major impact on your application.
Mark Dobbs, Account Director at TORC24 said:
“As we head towards the end of the tax year, now is a great time to be spring cleaning your finances – especially as this is also the time of year people are most likely to consider a house move.
“We work closely with Barratt Homes and their customers to find the right mortgage products, yet we find the same myths about the mortgage process popping up again and again. As you’ll see, in most cases, these myths simply aren’t true. Lenders want to lend – but they must lend responsibly. Be open with your lender, even if that is hard to do. That transparency will work wonders and help the purchase process run much more smoothly.”
Tammy Bishop, Sales Director at Barratt Homes, Southampton Division said:
“It can be very worrying for buyers who are unsure if they can afford a new home, and with differing advice available, it can be hard to distinguish between what’s fact and fiction, which may be preventing people from taking the step towards purchasing their first property or their dream family home.
“As these mythbusters demonstrate, there is usually a solution and if you’re unsure, talk to us anyway. We can put you in touch with our specialist new-build mortgage advisors who can offer products based on your own individual circumstances. There’s no one-size-fits-all approach – that new home purchase could be more affordable than you think!”
For more information visit barratthomes.co.uk.