Clearing Up Misconceptions
Bad credit mortgages often carry something of a stigma, but they are actually a fantastic option for a wide range of buyers. Here are some of the most common bad credit mortgage myths debunked to give you peace of mind.
Myth: Bad Credit Mortgages Are Impossible to Obtain
One of the most persistent myths is that bad credit mortgages are unattainable. While it’s true that having a poor credit score can limit your options and lead to higher interest rates, it doesn’t mean that getting a mortgage is impossible. More lenders than ever are willing to work with individuals with less-than-perfect credit. It’s important to note that the criteria for approval will be stricter, and you may need to provide additional documentation or a larger deposit. With a mortgage broker by your side though, securing a great deal could be within reach
Myth: Bad Credit Mortgages Will Leave You in a Bad Financial Situation
Another widespread belief is that bad credit mortgages are a one-way ticket to financial ruin. This likely stems from the fact that these mortgages typically come with higher interest rates, which can increase the cost of borrowing. However, the reality can be quite different! A bad credit mortgage can actually be a great way to rebuild your financial health. By making consistent, on-time payments, you can improve your credit score over time. The key to avoiding financial difficulties is to ensure that you choose a mortgage with terms that are manageable within your budget.
Myth: All Bad Credit Mortgages Are the Same
There’s a misconception that all bad credit mortgages are essentially the same – high interest rates, inflexibility, and a lack of options. This couldn’t be further from the truth! There is a wide variety of bad credit mortgage products available, each with their own features and terms. This is where working with a mortgage broker becomes invaluable. They will have access to a broad range of lenders and can help you compare different options and find a mortgage that best suits your needs. They will also be able to provide guidance on how to improve your credit score.
Myth: It’s Better to Wait Until Your Credit Improves
While it’s true that a better credit score can allow you to take advantage of great deals and favourable terms, waiting isn’t always the best option. Property prices may rise while you take years to build up your credit score, and you could miss out on building equity during that time. Plus, as we mentioned already, securing a mortgage now and making regular payments allows you to start improving your credit score. The best thing you can do is look at your own situation and seek advice from a broker moving forward.
Don’t Let Myths Hold You Back!
Bad credit mortgages are often misunderstood, but they can be a great way to get on the property ladder and start reaping all the rewards that owning your own home has to offer. So why not talk to a mortgage broker today?