Common Mortgage Myths
- Desiree Thomas
- Feb 11
- 2 min read
Here are some common mortgage myths that often mislead homebuyers:
1. You Need a 20% Down Payment
Many people believe they must put down 20% to buy a home, but FHA loans require as little as 3.5%, and VA/USDA loans offer 0% down options.
2. You Must Have a Perfect Credit Score
While a higher credit score helps with better rates, you can still qualify for a mortgage with a credit score as low as 580 (or even lower with some lenders).
3. Renting Is Always Cheaper Than Buying
While renting may have lower upfront costs, buying a home helps you build equity and can be more affordable long-term, depending on interest rates and local housing markets.
4. You Should Always Get a 30-Year Fixed Mortgage
A 30-year fixed mortgage is common, but it’s not always the best choice. A 15-year mortgage saves on interest, and an adjustable-rate mortgage (ARM, it all depends on what's best for your situation.
5. You Can’t Get a Mortgage if You’re Self-Employed
Self-employed individuals can get mortgages, but they may need to provide extra documentation, such as tax returns, bank statements, and proof of stable income.
6. Getting Pre-Approved Means You’re Guaranteed a Loan
Pre-approval is not a final approval—lenders still need to verify details before granting the actual mortgage.
7. You Should Pay Off Your Mortgage as Fast as Possible
While eliminating debt is great, some mortgages have low interest rates, and paying extra might not be the best use of funds compared to investing or keeping cash for emergencies.
8. You Can’t Buy a Home With Student Loan Debt
Having student loans doesn’t disqualify you from a mortgage! Lenders look at your debt-to-income (DTI) ratio, and programs like FHA loans have flexible requirements.
9. You Should Always Buy the Most Expensive Home You Can Afford
Just because you qualify for a higher loan amount doesn’t mean you should use it all. It’s smarter to stay within your budget for financial stability.
10. You Can’t Get a Mortgage With Bad Credit
Some lenders offer bad-credit mortgages, and FHA loans are designed for borrowers with lower credit scores. Improving your credit can help secure better rates, but it’s not a deal-breaker.
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