Myths of First-Time Home Buyers
There are a bunch of myths floating around about buying a home for the first-time, and they can definitely make the process feel more confusing than it needs to be. Here are some of the most common ones, along with the reality behind them:
1. You need a 20% down payment
Myth: You can't buy a home unless you have at least 20% of the purchase price saved up.
Reality: While 20% down can help you avoid private mortgage insurance (PMI), it's not required. Many first-time buyers qualify for loans with much lower down payments — sometimes as little as 3% (conventional loans) or even 0% (VA and USDA loans).
2. You must have perfect credit
Myth: Only people with top-tier credit scores can get approved.
Reality: A high credit score helps, but many lenders accept scores as low as 580 for FHA loans. What matters more is overall creditworthiness — payment history, debt-to-income ratio, etc.
3. Renting is always cheaper than buying
Myth: It's always more affordable to rent than to own.
Reality: It depends on your local market, interest rates, and how long you plan to stay. In some areas, monthly mortgage payments (especially with fixed rates) can be equal to or even lower than rent — and you're building equity over time.
4. You should always buy the biggest home you can afford
Myth: Maxing out your budget means you're making a smart investment.
Reality: Bigger isn't always better. Stretching your budget can leave you "house poor," with little money left for emergencies, maintenance, or living life.
5. You can’t buy with student loans
Myth: If you have student loan debt, you're out of the running.
Reality: Lenders do consider your debt-to-income ratio, but having student loans doesn't automatically disqualify you. If your overall financial picture is stable, you're still a strong candidate.
6. You should wait for the “perfect” market
Myth: Timing the market will get you the best deal.
Reality: Markets are unpredictable. If you're financially ready and plan to stay in the home for a while, it may be smarter to buy when it makes sense for you — not just when headlines say it's the "right time."
7. First-time buyer programs are too good to be true
Myth: Assistance programs come with strings attached or hidden costs.
Reality: There are legit local, state, and federal programs that help with down payments or closing costs. You just have to read the terms and make sure you qualify.
For More Information about being a first-time home Buyer - Contact Allen Deaver of Asset Realty today.
