Common Mortgage Myths Debunked: What First-Time Buyers Need to Know
If you’re a first-time homebuyer, chances are you’ve heard all kinds of advice—some good, some… not so much. Mortgage myths are everywhere, and believing the wrong ones can slow you down or even keep you from buying a home. Let’s set the record straight and clear up some of the biggest misconceptions so you can move forward with confidence.
Myth #1: You Need 20% Down to Buy a Home
This is probably the biggest myth out there. While putting 20% down can help you avoid private mortgage insurance (PMI), it’s not a requirement. There are plenty of loan options that allow for much lower down payments:
Conventional loans: As low as 3% down
FHA loans: 3.5% down
VA & USDA loans: 0% down for those who qualify
The key? Finding the right loan for your situation instead of waiting years to save for an unnecessary 20%.
Myth #2: All Mortgages Are the Same
Not even close. There are several types of mortgage loans, and the one you choose affects your monthly payment, total interest paid, and long-term financial flexibility.
Fixed-Rate Mortgage (FRM): Predictable payments, great for stability
Adjustable-Rate Mortgage (ARM): Lower initial rate, but can fluctuate over time
Government-Backed Loans: FHA, VA, and USDA loans help buyers who need lower down payments or have unique situations
Choosing the right mortgage isn’t a one-size-fits-all situation—it’s about what works best for you now and in the future.
Myth #3: Pre-Qualification = Pre-Approval
Nope. These terms get thrown around interchangeably, but they mean very different things:
Pre-Qualification: A quick estimate of what you might be able to borrow, based on self-reported info
Pre-Approval: A deep dive into your finances, including credit checks, income verification, and debt analysis
A pre-approval carries more weight when making an offer on a home because it shows sellers you’re serious and financially ready.
Myth #4: You Can’t Get a Mortgage with Student Loans
Student debt is a concern, but it doesn’t automatically disqualify you. Lenders care more about your debt-to-income ratio (DTI)—how much debt you have compared to your income—rather than the fact that you have student loans.
A solid repayment plan and good credit history can put you in a strong position to qualify for a mortgage, even with student loans.
Myth #5: You Must Work with a Real Estate Agent to Buy a Home
While an agent can be a huge asset, they’re not required. If you’re confident in your ability to navigate the process and negotiate, you can buy a home on your own.
That said, most buyers benefit from having an agent, especially when it comes to finding listings, making competitive offers, and handling negotiations. Just make sure whoever you work with has your best interests in mind.
Why These Myths Matter
Believing mortgage myths can:
Delay your homeownership journey
Lead to unnecessary financial stress
Cost you more money in the long run
The more informed you are, the better decisions you’ll make. And when it comes to something as big as buying a home, knowledge is power.
So, What’s Next?
If you’re serious about homeownership and want to avoid the common pitfalls, I’ve got something for you. Download "The Ultimate Homebuyer’s Guide"—a free resource packed with insights, checklists, and mortgage strategies to help you move forward with confidence.
Still have questions? Reach out—I’d love to help you navigate your mortgage options the right way.