Think you can’t get a mortgage? Think again… Erin Gallacher, consultant mortgage adviser, dispels some of the common myths in part two of her “popular mortgage myths dispelled” series.
I can’t get a mortgage because I’m on a fixed term contract.
Not true. Most lenders will lend against a fixed term contract. Of course, every lender has different rues around this – the most common being that the contract must run for at least 12 months, with six months outstanding at the time of application. This being said, there are lenders which will consider contracts of less than 12 months, with just three months outstanding at the time of application.
I can’t get a mortgage because I’m in a debt management plan (DMP)
Don’t panic. If you have had a debt management plan in place for six months plus, you can get a mortgage. In fact, there are quite a number of lenders which will consider applicants who are in or have been in a debt management plan.
I can’t get a mortgage because I’m self-employed with less than three years’ accounts
Not true. We have access to lenders which will offer mortgages to self-employed applicants with only one years’ worth of accounts. If you’ve been trading for less than this we may still be able to help, providing a profit is being made which can be evidenced by an accountant.
I don’t earn enough to get onto the property ladder
Well of course in some cases this may be true, but before you write it off completely there are lots of options out there that may be worth looking in to. For example, did you know that some lenders will take into account non-court ordered maintenance payments, income from a let room in the house and even income from a family member (if they are willing to guarantee the mortgage).
I can’t get a mortgage because I only have a small deposit
Not true. Most lenders only require a deposit of 5%, which can be made up of savings or gifted to you from a family member. There are also some lenders which will consider a deposit which has been achieved via a personal loan – as long as it is affordable! It is worth bearing in mind that if your deposit has been achieved via a personal loan, you will not be able to participate in any government help to buy scheme.
I can’t get a mortgage because I’m on maternity leave
I’m glad to say that this is not true. Most lenders will lend to those on maternity leave as long as they can obtain proof of hours and salary when the applicant returns to work. This proof usually comes in the form of a letter from the employer.
I can’t get a mortgage because I’m paid in a foreign currency
Incorrect. The majority of foreign currencies are accepted by lenders in the UK (including Australian dollar). Lenders will simply convert the currency to sterling to work out the UK income. It is worth noting that in most cases the applicant must be liable to pay tax in the UK.
For more of my “mortgage myths dispelled” take a look at part one.
For more information on any of the points listed above you can contact me directly on 01625 416392 or request a call back from a qualified adviser on the Residential Desk.