Fact or fiction: Homebuying edition

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No more mortgage mayhem. Buying and owning a home ain’t for the faint of heart. That’s why you should check out Mortgage Matchup to connect with a local mortgage expert who is dedicated to helping you secure your dream home loan.

Starting the homeownership journey should be a big, exciting step in the game of life—not a daunting rigmarole. But with so much info out there, figuring out the first step can be tough, making the path forward seem way more complex than it really is.

That’s why we teamed up with Mortgage Matchup to break down some of the most common mortgage myths homebuyers face. Prepare to clear the way and score your dream home.

Mortgage myth #1: You need a 20% down payment to buy a home.

Need a quick refresher? A down payment is the initial cash amount you put toward buying a house. Your parents might tell you it’s always 20% of the purchase price, but that’s not the whole story. A variety of mortgage loan options require far less than a 20% down payment—and some don’t require any money up front.

For example, FHA loans may require only 3.5% down from qualified borrowers, while other government-backed loans allow eligible homebuyers to put 0% down. In short, the 20% down payment is no longer the standard.

Mortgage myth #2: You need a perfect credit score to qualify for a mortgage.

Is your credit score a WIP? Aren’t we all? You don’t need a perfect score to buy a home. Think of it like this: Your credit score is simply a record of your credit history that shows lenders your ability to repay loans.

So, what qualifies as a good credit score for purchasing a home? The answer will depend on your personal situation, the type of home loan you’re seeking, and even your location. If you’re worried about approval due to your credit score, consider reaching out to your local mortgage broker. They can provide guidance on improving your score and securing the right loan—really everything under the homeowning sun. And it might not take as long as you think: Small changes can have big impacts on your homeownership journey.

Mortgage myth #3: You can’t buy a house with debt.

Fully false. Let’s be real: Who doesn’t carry some debt these days? While your debt-to-income (DTI) ratio is an important factor in the loan process, carrying some student loan or credit card debt won’t automatically take you out of the running for securing your palace.

Your DTI ratio measures how much of your income goes toward paying off debt, and it’s calculated by dividing your total monthly debt payments by your gross monthly income. Generally speaking, lenders prefer a DTI ratio of 35% or lower, meaning that 35% of your income (at max!) is allocated to debt repayment. That said, some government-backed agencies will lend to borrowers with a DTI ratio of up to 49%.

So, back to the big question: Can you buy a house with debt? You sure can. Lenders will consider your debt in the buying process, but it won’t automatically exclude you from snagging a home. And if you’ve got a strong credit score to show that you make regular, on-time payments, that’s even better.

Mortgage myth #4: Buying a home is more expensive than renting.

When you compare monthly rent to the purchase price of a home, it’s easy to see why so many folks think renting is the cheaper choice. Here’s the thing: Depending on the area, a monthly mortgage payment can be surprisingly close to what you currently pay in rent, and sometimes even cheaper! So for a similar monthly expense, you could be investing in a home rather than forking over your cash to a landlord.

It’s also important to consider the long-term financial benefits of homeownership. Having the keys to your own castle means you can build equity, all while enjoying the stability and freedom of having a space you can truly call your own. Plus, with a fixed-rate mortgage, your principal and interest payments remain consistent over time. Sounds a lot better than those wildly fluctuating rent prices, right? Once your home payment is locked in, it generally stays the same for the life of the loan.

If you’re wondering whether to rent or buy, a mortgage broker can help you understand the estimated monthly costs and potential long-term benefits of homeownership.

Mortgage myth #5: The mortgage process is long and complicated.

Not with an expert by your side! With the guidance of a mortgage broker, the loan process becomes much faster and simpler than you might expect.

These local home loan experts navigate the mortgage landscape for you, negotiate terms and rates, and expedite the entire process. Their extensive knowledge and network provide access to loan options that often come with more-competitive pricing and rates than the industry average, leading to long-term savings. Plus, there’s no need to prepare anything before reaching out; they’ll help you identify what you need based on your priorities.

With all those mortgage myths out of the way, are you feeling ready to take the next step? Go ahead and connect with a local home loan expert at Mortgage Matchup.

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