Misconceptions about mortgage eligibility could be stopping prospective first-time buyers from exploring their options, according to new research. A Lloyds survey of over 1,000 potential first-time buyers found that 58% incorrectly believed existing debt would automatically prevent them from securing a mortgage.
The survey also revealed that 37% thought a 20% deposit was essential, while 40% believed using an overdraft would prevent approval. Additionally, 38% thought receiving benefits would rule out an applicant, and 31% cited recently changing jobs as a barrier.
Lloyds clarified that none of these factors would automatically prevent most lenders from offering a mortgage. However, applications remain subject to individual circumstances and affordability and eligibility assessments.
Ian Harris, President of NAEA Propertymark, commented that buying a first home is already challenging due to affordability, deposits, and access to suitable housing. He added that prospective buyers should not rule themselves out due to common misconceptions.