It's currently one of the most difficult times to get on the property ladder.
After the economic uncertainty caused by the Coronavirus pandemic, the Office for National Statistics (ONS) revealed this week that house prices in June saw their highest annual growth since 2004.
The price to purchase a home in the UK rose by 13.2% and the average house cost in June was a record £266,000.
READ MORE: Liverpool named as one of the most affordable cities to buy a home in the UK
Liverpool has recently been named as one of the more affordable places to buy a home in the UK with the average cost estimated to be £215,741.
However, even when first-time buyers are able to coup the money together to afford a home, mortgage experts warn that there are many misconceptions and myths surrounding buying a home that still make it a tricky process.
We've rounded up a list of 5 of the more common mortgage myths identified by consumer watchdog Which? to help.
If your rent costs more than mortgage repayments, then you’ll be able to secure a mortgage
Which? warn that just because your rent costs more than your mortgage repayments, it does not mean that you'll get accepted by a lender.
They say that a lender will calculate your income and outgoings to determine if you can afford the monthly repayments now and if they were to rise in the future - due to something such as an increase in interest rates.
A low credit score means you won't be able to get a mortgage
Although it is more difficult to get a mortgage if you have a bad credit history, Which? say that there are mortgage lenders out there that offer bad credit mortgages just for people with poor credit scores.
Bad credit mortgages often come at much higher rates - so Which? advise anyone who has no credit history to take some time to build up a good credit score before opting for one of these.
*Are you trying to get on the property ladder? Let us know in the comments
You can only get a mortgage from your current bank
Although your bank may promote their range of mortgages to you, Which? advises that its best to browse what's out there on the market before making a final decision - even if your bank is offering a discounted rate to you as an existing customer.
You always need a deposit to buy a property
It is usually required that you need a deposit of at least 5% to purchase a home, but Which? says there are examples of 100% mortgages being offer by lenders. Although a parent or close family member will need to put money aside to guarantee these loans.
Which? does warn that 100% mortgages can be incredibly risky as they carry the danger of negative equity - which is when your property’s value falls and you owe more on your mortgage than your home is worth.
Parents need spare cash to help with the process
Parents can also act as guarantors on your mortgage if they are homeowners, which could boost your chances of being accepted by a mortgage lender.
Your parents would have to secure a charge against their own home to do this and this means they would have to cover any shortfall if your property was repossessed and sold by the lender.
You can visit Which? to find the full list of mortgage myths debunked here
Want to find out the latest news in your area? Enter your postcode on our In Your Area page here
