Outdated myths about what it takes to be approved for a mortgage are preventing many people from pursuing their dream of homeownership.
Research by Online Mortgage Adviser has uncovered evidence those working part-time, flexibly or who are self-employed along with those who have a poor credit history have been prevented from applying for a home loan through fear of rejection.
Now, in a bid to bust some outdated mortgage myths the advisor has published a list of five types of potential borrower who assume they won’t qualify – but actually could.
David Bird, director of Online Mortgage Advisor, said the advice market has not kept pace with changing economic and social developments which mean many people are now working for themselves or for a variety of employers.
He added: “Advice varies enormously between brokers and criteria varies significantly from lender to lender. When one person goes to a broker that fails to secure a mortgage or applies directly to the wrong lender, they presume this goes for everyone and tell their friends and family so.
“Of course, there will still be some people who will face challenges for one reason or another, but the key to truly understanding your eligibility for a mortgage is getting the right advice for your situation.”
Naomi Willis, who works flexibly running the Skint Dad blog, was among those who assumed they wouldn’t be eligible for a mortgage.
“My husband and I guessed we couldn’t get a mortgage because we had a new business and some poor credit history. On paper, we were not mortgage material,” she said.
“It always felt easier and safer not to bother applying until we were ready – out of debt and back on track. However, to my surprise my presumptions were proved wrong recently as we discovered we are eligible and we could be homeowners sooner than we thought.”
The top mortgage hunters who assume they won’t qualify – but could
- Entrepreneurs – they have achieved business growth but reinvestment and choosing to pay themselves a smaller salary has limited mortgage opportunities.
- The Flexi Crowd – self-employed but with a variable monthly income or new to working for themselves. They may have less than two or three years accounts, which mean they fall outside lenders’ criteria.
- Globe Trotters – they have returned from abroad so have gaps in their employment and credit history as well as a lack of searchable addresses.
- The Financially Unfortunate – someone paying for an ex-partner’s financial problems or people who have been ill or made redundant.
- The Maternity Leavers – lender are often reluctant to lend to people on statutory maternity pay.
