Getting a mortgage is one of the biggest financial decisions you’ll ever make and misinformation can lead to costly mistakes.
With so many opinions flying around at backyard barbeques, it’s easy to get confused.
Here are some of the most common mortgage myths and why they could be hurting your wallet.
1. “The Lowest Interest Rate = The Best Loan”
Reality: A low rate looks appealing, but it’s not the whole story.
Why it matters: Some lenders offer low rates but charge high fees, lock you into rigid terms with limited functionality, or have high exit costs. A mortgage broker helps you look at the full cost/functionality of a loan, not just the headline rate.
2. “You Need a 20% Deposit to Buy a Home”
Reality: You can buy with much less.
Why it matters: Waiting to save 20% might delay your homeownership goals for years. Options like Lenders Mortgage Insurance (LMI), government grants & schemes, low-deposit loans make it possible to get into the market sooner.
3. “You Can’t Get a Loan If You’re Self-Employed”
Reality: It can be trickier, but far from impossible.
Why it matters: Many lenders have flexible options for self-employed borrowers, including alt-doc loans and solutions tailored for variable income. A mortgage broker can guide you to lenders who suit your situation.
4. “It’s Better to Go Directly to Your Bank”
Reality: Your bank only shows you their product, not the best on the market.
Why it matters: A broker has access to a wide range of lenders and loan types. That means more choice, potentially better rates, and someone negotiating on your behalf.
5. “Once You’ve Got a Loan, You’re Set for Life”
Reality: The market changes and so should your loan.
Why it matters: Interest rates fluctuate and your financial situation may evolve. Reviewing your mortgage every 6-12 months can save you thousands in interest and unlock better features or terms.
Don’t let myths and misinformation hold you back from making smart financial decisions. Please reach out to Allan Hall Finance for a free consultation to discuss your financial goals.