What Are the Common Myths About Mortgages?
Debunking the Most Frequent Misconceptions for Homebuyers
For many homebuyers—especially first-timers—the mortgage process can feel overwhelming. Unfortunately, outdated advice and misinformation only add to the confusion. Let’s set the record straight by debunking some of the most common mortgage myths.
💭 Myth #1: You Need a 20% Down Payment
Truth: While a 20% down payment can help you avoid private mortgage insurance (PMI), many loan programs allow much lower down payments.
FHA loans: as low as 3.5% down
Conventional loans: as low as 3% down for qualified buyers
VA and USDA loans: 0% down for eligible borrowers
You don't have to wait years to save up 20%—there are options that make homeownership more accessible.
💭 Myth #2: You Need a Perfect Credit Score
Truth: A high credit score helps, but you don’t need a perfect 800+ score to qualify for a mortgage.
FHA loans accept credit scores as low as 580 (or even lower with larger down payments)
Conventional loans may start around 620
Lenders consider your whole financial picture, not just your credit score.
💭 Myth #3: You Should Always Choose the Lowest Interest Rate
Truth: While a low interest rate is important, it’s not the only factor to consider.
Look at:
Loan terms (15 vs. 30 years)
Closing costs
Points and fees
Sometimes a slightly higher rate with fewer upfront costs could be the better deal long-term.
💭 Myth #4: Getting Pre-Qualified Is the Same as Being Pre-Approved
Truth: Pre-qualification is just an estimate based on self-reported info. Pre-approval involves a deeper financial review by a lender and gives you a stronger edge when making an offer on a home.
💭 Myth #5: Renting Is Always Cheaper Than Buying
Truth: In the short term, renting can seem cheaper. But over time, buying builds equity and can be a better investment—especially in markets where rent continues to rise.
💭 Myth #6: You Can’t Get a Mortgage with Student Loans
Truth: Many buyers with student debt successfully qualify for mortgages. Lenders look at your debt-to-income (DTI) ratio, and manageable student loans don’t automatically disqualify you.
Final Thoughts
When it comes to mortgages, don’t let myths hold you back from your goals. With the right guidance and a clear understanding of your options, homeownership may be closer than you think.