Home financing can feel overwhelming, especially with the abundance of misinformation
floating around. Whether you’re a first-time buyer or someone re-entering the market,
myths about down payments, credit scores, and loan options can cause unnecessary
confusion and delay your homeownership goals.
At Highlands Residential Mortgage, we’re here to set the record straight. Let’s debunk
some of the most common home financing misconceptions so you can confidently move
forward with your home purchase.
Myth #1: You Need a 20% Down Payment to Buy a Home
The Reality: While putting 20% down can help you avoid mortgage insurance, it’s far
from a requirement. Many loan programs—such as FHA, USDA, VA, and select
conventional loans—offer significantly lower down payment options, sometimes as low
as 3%, and sometimes no down payment at all.
We even offer down payment assistance programs, making homeownership more
accessible than ever.
Myth #2: A Perfect Credit Score is Required
The Reality: You don’t need a 780 FICO score to qualify for a mortgage. In fact, FHA
loans are designed for buyers with lower credit scores, sometimes starting in the mid-
500s. Some conventional loans allow credit scores as low as 620, depending on the
scenario.
The key is working with a lender who understands how to guide you through the
process and connect you with the right program for your financial situation.
Myth #3: Renting is Always Cheaper Than Owning
The Reality: While renting may seem less expensive month-to-month, rising rental
costs and a lack of long-term return often make homeownership the smarter financial
move. With a fixed-rate mortgage, your monthly principal and interest remain stable,
plus you’re building equity with every payment.
Homeownership means you’re investing in your own future, not your landlord’s.
Myth #4: Getting Pre-Approved is the Same as Being Pre-Qualified
The Reality: Pre-qualification offers a rough estimate of what you might afford. Pre-
approval, on the other hand, involves a more thorough review of your finances and
credit, giving you a stronger standing when making offers on a home.
In competitive markets, sellers often prefer buyers who are already pre-approved. It
shows you’re serious and financially prepared.
Myth #5: You Should Wait for Rates to Drop
The Reality: Trying to “time the market” rarely works out in your favor. While interest
rates may fluctuate, home values tend to appreciate over time. Waiting could mean
paying more for the same home down the line.
Instead, consider the strategy many buyers use—buy now and refinance later if rates
drop, allowing you to start building equity sooner rather than missing out altogether.
Final Thoughts
There are more home financing options available than you may think, and the right loan
is out there. Don’t let outdated information or misconceptions keep you from owning a
home.
Ready to Take the Guesswork Out of Home Financing?
Talk with a Highlands Residential Mortgage expert today to get the facts, explore your
options, and take the first step toward confident homeownership.
