Mortgage myths

Lesson 8 of 12 in our free Buying a Home guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Buying a Home is free for everyone.

Questions you'll answer

Mo checks their credit file and finds an old mobile phone account they never opened. What should they do?

Myth: “There's one universal credit score every lender uses.” — Lenders use their own scoring with data from credit reference agencies.
Fact: “Never having borrowed anything can make it harder to get a mortgage.” — A thin credit file gives lenders little to go on.
Fact: “Student loan repayments (from your payslip) can affect affordability.” — They don't show on your credit file, but they reduce your take-home pay, which lenders look at.
Myth: “Self-employed people can't get mortgages.” — They can, usually with a couple of years of accounts or tax returns.
Myth: “You should always borrow the maximum offered.” — Borrow what you can comfortably afford — even if rates rise.
Checking your credit file for errors months before applying → Mortgage-ready. Time to fix any problems.
Taking out new finance the week before applying → Not helpful. More debt, more searches.
Keeping payments on existing credit up to date → Mortgage-ready. Steady and reliable.
Building a separate emergency fund too → Mortgage-ready. Homes break. You'll need a buffer.