Mortgage Myths Debunked: What You Really Need to Know

For many people, the idea of buying a home comes with a lot of questions—and just as many misconceptions. With so much information available, it’s easy to get caught up in myths about mortgage rates, down payments, and credit scores. Understanding the facts can help you navigate the home loan process with confidence. Let’s set the record straight by debunking some of the most common mortgage myths.

Myth #1: You Need a 20% Down Payment to Buy a Home

A 20% down payment has long been considered the gold standard, but it’s not a requirement. Many homebuyers qualify for a mortgage with as little as 3-5% down, depending on the loan type. Government-backed loans, like FHA and VA loans, offer even lower down payment options. While a larger down payment can reduce your monthly mortgage cost, it’s not a barrier to homeownership if you don’t have 20% saved.

Myth #2: A Perfect Credit Score is Required

Your credit score does impact mortgage approval and interest rates, but you don’t need a perfect score to qualify for a loan. Many lenders approve loans for buyers with credit scores in the 600s, and government loan programs offer options for those with lower scores. Instead of focusing on achieving a flawless score, work on building good credit habits, like paying bills on time and reducing debt.

Myth #3: Renting is Always Cheaper Than Owning

While renting might seem like the more affordable option in the short term, homeownership builds equity—meaning you’re investing in your future instead of paying a landlord. In many markets, mortgage payments can be comparable to or even lower than rent, especially as rental prices continue to rise. Plus, with a fixed-rate mortgage, your monthly payment stays the same, unlike rent, which can increase year after year.

Myth #4: You Should Always Choose the Lowest Interest Rate

A low interest rate is important, but it’s not the only factor to consider. Some loans with ultra-low rates may come with higher fees, shorter loan terms, or stricter requirements. It’s essential to compare the total cost of the loan, including closing costs, monthly payments, and long-term savings. The best mortgage is the one that fits your financial situation, not just the one with the lowest rate on paper.

Myth #5: Getting Pre-Approved Guarantees a Loan

A pre-approval is a great step toward homeownership, giving you a clearer picture of what you can afford and strengthening your offer when buying a home. However, it’s not a guarantee. Lenders still review your income, employment, and credit profile before finalizing the loan. Making major financial changes—like taking on new debt or changing jobs—after pre-approval can affect your ability to secure financing.

Myth #6: It’s Better to Pay Off Your Mortgage as Fast as Possible

While paying off your mortgage early can save on interest, it’s not always the best financial move. If you have low-interest debt and extra funds, you might be better off investing in retirement accounts, emergency savings, or home improvements. Before making extra mortgage payments, consider whether the money could work harder for you elsewhere.

Know the Facts, Buy with Confidence

Buying a home is one of the biggest financial decisions you’ll make, and knowing the truth about mortgages can make the process smoother and less stressful. At BankFirst, we’re here to guide you through the home loan process and help you find the right financing solution for your needs.

If you’re thinking about buying a home, reach out to us today—we’ll help you separate fact from fiction and take the next step toward homeownership with confidence.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.