Getting ready to buy your first home is an exciting time. It’s a big step toward independence, stability, and more money. But all that fun comes with a lot of questions, especially when it comes to mortgages. A lot of false or out-of-date information is out there, and a lot of first-time buyers believe these so-called “rules” that can stop them.
Myths about a 20% down payment, credit scores, and interest rates can make homeownership seem more difficult or out of reach than it is. The right lender and expert guidance make home buying more flexible and achievable than most people realize.
In this guide, we’ll debunk 10 common mortgage myths that often confuse new buyers and share practical insights to help you make confident, well-informed decisions.
Key Takeaways
- Remember not to believe everything you hear about home loans. Many “rules,” like the need for a 20% down payment or perfect credit, are just old-fashioned mortgage Homebuyer myths.
- First-time homebuyers have more options than they think. Some programs help with credit and lower down payments, and mortgage loans can be tailored to each buyer’s needs.
- Credit isn’t the only thing that matters. When lenders look at loan applications, they look at the applicant’s overall financial health, income, and the ratio of debt to income.
- Private Mortgage Insurance (PMI) isn’t always needed. Once you have 20% equity in your home, you can often get rid of it.
- Look around. Interest rates and terms vary a lot from one lender to the next. It can save you a lot of money in the long run to compare your options.
- Make a good budget. Don’t borrow the most amount that is available; only borrow what you can easily pay back.
- Things don’t depend on timing. No matter what time of year it is, you can find a great deal on a house.
What Is a Mortgage?
When you’re buying a home for the first time, one of the first questions that comes up is What is a Mortgage? A mortgage is a type of loan specifically used to purchase real estate, such as a home or property. A lender, like a bank or mortgage broker, gives you the money you need to buy a house. You agree to pay back the lender, plus interest, over a set amount of time, usually 15 to 30 years.
10 Common Mortgage Myths That First-Time Buyers Should Know
Here’s the truth behind mortgage myths, plus practical solutions to help you make confident decisions.
1. Myth: You must put 20% down to get a mortgage
This is one of the oldest mortgage misconceptions. While 20% helps you avoid Private Mortgage Insurance (PMI), it’s not mandatory.
Most lenders now offer loans with lower down payments, as little as 3% for conventional mortgages or even 0% through special programs.
Solutions:
- Explore FHA, VA, and USDA loan programs that allow low or no down payments.
- Build savings gradually and consider down payment assistance programs in your area.
- Ask about mortgage options that fit your financial comfort.
2. Myth: Renting is always cheaper than owning
While renting may seem cheaper initially, homeownership builds long-term equity and stability. As rents rise, a fixed-rate mortgage loan often becomes more affordable over time.
Solutions:
- Compare total monthly costs — rent vs. mortgage + taxes + insurance.
- Use online affordability calculators to estimate your real home cost.
- Consider future appreciation and tax deductions for mortgage interest.
3. Myth: You need a perfect credit score
A high score helps, but it’s not the only factor. Lenders also look at income, debt-to-income ratio, and job stability when evaluating applications.
Solutions:
- Check your credit report early and dispute any errors.
- Pay bills on time and reduce credit card balances.
- Some lenders and mortgage brokers offer flexible credit programs for first-time buyers.
4. Myth: You can’t buy a home if you have student or other debt
Many first-time homebuyers wrongly believe their existing loans disqualify them. What matters is how much of your monthly income goes toward debt.
Solutions:
- Aim for a debt-to-income (DTI) ratio under 43%.
- Consider consolidating or refinancing high-interest debts before applying.
- Provide full documentation to your lender — transparency helps approval chances.
5. Myth: PMI lasts forever
Private Mortgage Insurance isn’t permanent. For most conventional loans, it can be removed once you reach 20% home equity.
Solutions:
- Track your loan balance and home value — request PMI cancellation when eligible.
- Refinance if your home value increases significantly.
- Ask your lender about PMI removal timelines.
6. Myth: You should borrow the maximum amount approved
Just because a lender approves a certain figure doesn’t mean you should spend it all. Over-borrowing can stretch your finances and create long-term stress.
Solutions:
- Create a realistic budget that includes all monthly expenses.
- Leave room for maintenance, emergencies, and lifestyle changes.
- Use your pre-approval amount as a guide, not a target.
7. Myth: The best time to buy is in spring
The “spring buying season” is a myth that doesn’t apply everywhere. Home prices, inventory, and demand vary by region.
Solutions:
- Great deals can appear year-round, so check your local market.
- Work with a realtor familiar with seasonal price patterns.
- Focus on readiness, not the calendar.
8. Myth: The lowest interest rate is always the best deal
A low mortgage interest rate looks appealing, but the true cost depends on loan fees, terms, and flexibility.
Solutions:
- Compare the Annual Percentage Rate (APR), not just the interest rate.
- Ask lenders for a full loan estimate including fees.
- Evaluate whether fixed or adjustable rates suit your plans.
9. Myth: Once your offer is accepted, the deal is done
An accepted offer is just the beginning. The mortgage process continues through underwriting, inspections, and appraisals.
Solutions:
- Keep all financial documents organized and ready.
- Avoid major purchases or credit applications until closing.
- Communicate frequently with your mortgage broker or lender to stay on track.
10. Myth: All lenders are the same
Not every lender offers the same rates, service, or loan types. Comparing options can save thousands over the life of your loan.
Solutions:
- Get quotes from at least three different lenders or Mortgage Broker Surrey BC.
- Compare not only rates but also responsiveness and transparency.
- quickmortgagesbc can help you explore competitive offers tailored to first-time buyers.
Conclusion
Understanding these common mortgage myths can save you stress, money, and time during your first home purchase. Focus on verified mortgage facts, plan your finances carefully, and partner with trusted professionals who can simplify the process.
If you want to buy a house for the first time in British Columbia, Quickmortgagesbc can help you understand your choices, compare rates, and get a mortgage that fits your needs, without believing the mortgage approval myths.
Frequently Asked Questions
Do I really need a 20% down payment to buy a home?
No. Many lenders allow smaller down payments, and programs like FHA or VA loans require less.
Is my credit score too low to get a mortgage?
Not necessarily. Lenders assess your full financial profile, not just your score.
What is Private Mortgage Insurance (PMI), and do I need it?
PMI is required when your down payment is under 20%, but it can be cancelled once you gain equity.
How does my credit score affect my mortgage?
The interest rate and loan terms you get depend on your score. Generally, higher scores mean lower mortgage rates.
