First-time buyer couple in their new home

If you are a first-time buyer, you may hear all kinds of ‘facts’ about buying your first home and obtaining a mortgage. But many of these facts are simply not true!

Getting your foot on to the property ladder is difficult enough without having to work out the financial and legal aspects for yourself. So, to help first-time buyers sort fact from fiction, we have chosen to discuss 5 of the biggest myths around mortgages and house buying.

First-time buyer myths

Myth 1: You need a big deposit

It is true to say that if you have a larger deposit you may have a wider choice of mortgages at potentially more favourable rates. It doesn’t mean you always need a big deposit, however. The coronavirus slowdown has led to some providers withdrawing mortgages that require a 5 or 10% deposit; these are known as 95% and 90% loan to value (LTV) mortgages.

Others, however, have retained their 90% LTV mortgages. This is where using an independent mortgage broker, such as Co-Navigate, is ideal because we access mortgages that individual house buyers and banks often can’t. If you have a lower deposit and can’t find a mortgage, speak to one of our experienced team members.

Myth 2: I must use the estate agent’s mortgage adviser

Estate agents and house builders often refer you to a mortgage adviser within their office. Some will tell you that it is compulsory to use their in-house adviser – that is simply not true!

You are free to use any mortgage adviser, bank or building society of your choosing. If you find your ideal house, tell the estate agent or house builder you are using your own adviser. 

The same goes for conveyancers or solicitors. You can use your own and do not have to instruct those used by the estate agent or house builder.

Myth 3: I can only get a mortgage through my bank

Banks and building societies provide mortgages – but they are not alone. Other financial institutions offer mortgages, although you often need an independent adviser to access the specialist providers.

Banks can only use their own mortgage products, whereas an independent adviser has access to many more. Even comparison websites cannot access all the products on the market. And independent brokers like us can often access better rates on mortgages than those tied to one provider.

Make sure you talk to an independent mortgage broker before you go house-hunting!

Myth 4: I do not need a mortgage until I find my dream home

If you wait until you find your dream home before considering your mortgage, it can end up as a nightmare. Unless you have checked what you can afford, your ideal house could be beyond your budget. 

Once you start considering buying your first home, it is advisable to speak to a mortgage broker or provider to find out how much you will be allowed to borrow and more importantly what is within your monthly budget.

Following the application process, if appropriate, we will ensure you receive an ‘agreement in principle’ (AIP). You often need to prove to the estate agent or house builder that you are in a position to buy and the AIP does just that. Please note that the AIP isn’t a mortgage offer. We can explain more about the AIP at a discovery meeting.

Myth 5: You only need a deposit and mortgage to buy a home

There’s more to buying a house than arranging a mortgage and having enough for a deposit. You need to remember that there are many costs included in buying a house.

Fees and expenses include, but are not limited to:

  • Survey costs
  • Mortgage arrangement and valuation costs
  • Solicitors fees
  • Removal costs
  • Buildings insurance
  • Stamp duty (your individual circumstances dictate what this may be)

If you are looking for your first home, remember that you must budget for these additional fees. This is something that we like to help you prepare at our first meeting, so you know what you can truly afford.

When you are ready to start searching your first home, contact us so we can help you find the best mortgage deal for you and be there to make the process as easy and as stress free as possible.

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