Buying a first home often comes with a mix of excitement and uncertainty. With so much information out there, even well-prepared buyers can feel unsure about what to expect. In many cases, common misconceptions create unnecessary hesitation.
Here are five mortgage myths that tend to cause confusion—and the facts that can help clear things up.
Myth 1: You Need a 20% Down Payment to Buy a Home
A common misconception is that buying a home requires a large down payment. This belief can hold buyers back or delay the process unnecessarily.
In reality, there are several loan programs designed to make homeownership more accessible. Government-backed loans, conventional options, and down payment assistance programs all offer paths forward with reduced upfront costs.
Instead of focusing on a single number, it is worth exploring which loan options fit your budget and financial goals. Team Mandi can help you sort through your options and find what makes the most sense for your budget.
Myth 2: Your Credit Score Must Be Perfect to Get a Mortgage
Another common misconception is that only buyers with excellent credit* can qualify for a home loan. While a higher credit score can help you secure lower interest rates, lenders consider many factors.
Mortgage lenders evaluate your overall financial profile, including:
- Income and employment history
- Debt-to-income ratio
- Savings and assets
- Credit history, including recent activity
Even if your credit score isn’t ideal, you may still qualify for a mortgage. Some loan programs are designed for buyers with less-than-perfect credit. Improving your credit before applying can help, but don’t assume you’re out of the running.
*Team Mandi does not provide financial, tax, or credit advice. Please consult a licensed professional for guidance.
Myth 3: A Prequalification and Preapproval Are the Same
You might hear these terms used interchangeably, but they mean different things.
- A prequalification is a quick estimate of how much you might borrow based on self-reported financial information. It’s informal and doesn’t guarantee loan approval.
- A preapproval involves submitting documentation, such as pay stubs, tax returns, and credit checks. It shows a lender has reviewed your finances and conditionally agreed to lend you a specific amount.
A preapproval carries more weight with sellers and real estate agents. It signals you’re a serious buyer and can speed up the homebuying process.
Myth 4: You Can’t Buy a Home if You Have Student Loans
Student loans are often seen as a barrier to homeownership. While they add to your monthly debt, they don’t automatically disqualify you.
Lenders look at your debt-to-income (DTI) ratio – the percentage of your income that goes toward debt payments. If your DTI is within acceptable limits, you can still qualify for a mortgage.
You might consider:
- Refinancing or consolidating student loans to lower monthly payments
- Increasing your income or reducing other debts
- Choosing loan programs with flexible DTI requirements
Don’t let student loans discourage you from exploring homeownership options.
Myth 5: Getting a Mortgage Is Always Complicated and Stressful
The mortgage process has a reputation for being overwhelming, but it doesn’t have to be. While there are several steps involved—applications, documentation, timelines—it can feel much more manageable with helpful guidance.
Having someone to explain the process, answer questions, and keep things moving can make a meaningful difference.
At Team Mandi, we walk you through each stage, clarify what to expect, and help you stay organized along the way. Whether you are looking into available loan options or preparing to close, our goal is to help make the process as smooth and straightforward as possible.
What Should You Do Next?
Clearing up confusion is one of the first steps toward feeling more confident about buying a home.
Whether this is your first home or a move toward something new, our team is here to support your homebuying journey. We help buyers at every stage explore loan options, access programs that reduce upfront costs, and stay informed throughout the process. Contact Team Mandi today!