Heard you need 20% down? Or that you can’t buy with student debt? Let’s set the record straight with 2025’s most common mortgage myths—debunked!
The homebuying journey can feel overwhelming, especially with all the “advice” out there. But how much of what you’ve heard about mortgages is actually true? Let’s break down the top myths we hear from buyers and set the record straight with facts for 2025.
Myth #1: You always Need a 20% Down Payment to Buy a Home
Reality: Many loan programs allow for as little as 0–5% down, depending on eligibility. Some options, such as VA and USDA loans, even offer $0 down for qualified borrowers. Keep in mind, if your down payment is less than 20%, private mortgage insurance (PMI) is usually required, but that doesn’t have to be a deal breaker!
Myth #2: You Must Have Perfect Credit to Qualify
Reality: You don’t need a perfect score to become a homeowner. Some loan options are available for credit scores below 700—even into the 500s in certain cases. Your overall financial picture and ability to repay are what matter most.
Myth #3: You Should Always Choose the Lender with the Lowest Rate
Reality: While a low interest rate is important, it’s not the only factor to consider. Fees, closing costs, loan terms, and the level of service you receive can impact your bottom line just as much as your rate.
Myth #4: You Can’t Buy a Home Without a 9-to-5 Job
Reality: Non-traditional income (like freelance, gig work, or self-employment) can still help you qualify, as long as you have the right documentation. Talk to a lender to learn what might work for you. Your unique situation doesn’t have to be a barrier.
Myth #5: You Should Pay Off All Debt Before Buying a Home
Reality: Paying down debt can help, but it’s not always the right move to clear out all balances before buying. Draining your savings could actually hurt your ability to qualify or put you in a tight spot for your down payment and closing costs. It’s all about balance.
Myth #6: You Can’t Buy a Home After Bankruptcy or Foreclosure
Reality: Life happens. Past setbacks don’t always mean you’re disqualified forever. Depending on the loan program, you may be eligible again after a required waiting period. Don’t count yourself out!
Myth #7: You Should Wait Until Rates Drop or the Market Crashes
Reality: Trying to “time the market” may be risky. One of the most important factors is your own financial readiness. If you’re prepared, today’s market may offer opportunities that work for your needs.
Myth #8: You’ll Lose Your Home if You Miss One Payment
Reality: Missing a payment is serious, but foreclosure is not immediate. Lenders often offer solutions if you reach out early. If you’re having trouble, connect with your lender to discuss your options and the risks associated with making late payments.
Myth #9: All Lenders Are the Same
Reality: Not all lenders offer the same loan programs, pricing, or service. Working with a local, experienced team like ours may help you find the right fit for your goals and guide you through the process with confidence.
Myth #10: If You’re Not Buying Your “Forever Home,” It’s Not Worth It
Reality: There’s no rule that says you have to live in your first home for decades. Many homeowners build wealth and flexibility by buying, then moving up or relocating as life changes. The first home is often a stepping stone.
CENTURY 21 Redwood Realty partners with Atlantic Coast Mortgage to help clients, friends, and family navigate the mortgage process with confidence. If you’ve heard a mortgage myth or aren’t sure what’s fact or fiction, reach out today. Our teams work together to provide real answers, clear guidance, and a homebuying experience that takes you from “What’s Next?” all the way to “Welcome Home!”
**For illustrative purposes only. “Myths” shown may be accurate in some instances, depending on individual circumstances or loan guidelines. Consult a licensed mortgage professional for details. Eligibility for all applicants cannot be guaranteed. Atlantic Coast Mortgage (“ACM”) and Century21 Redwood Realty are separate entities. Consumers are not obligated to use either or both entities to obtain financing or purchase a property.
Atlantic Coast Mortgage, LLC (“ACM”) is an Equal Housing Lender | Company NMLS 643114 (For licensing information, go to: www.nmlsconsumeraccess.org) | Licensure & Product Disclaimers/Disclosures: www.acmllc.com/legal
