Buying a home is a huge decision. Our goal is to make sure our clients have the knowledge and support they need – that starts with dispelling common myths about home buying.

Here are 10 myths that today’s first-time home buyers are often told.

Myth #1: You need a 20% down payment to get a mortgage.

While 20% down helps you avoid paying private mortgage insurance (PMI), it isn’t a requirement for a mortgage. You can buy a home with as little as 3-5% down. While buyers are tempted to save until they have the 20% down payment, this isn’t always the best idea. For example, if you put 10% down, you can use the money towards paying down a high-interest debt to improve your financial health. There are many programs that allow you to have a lower down payment. I can connect you with a lender or mortgage broker who can assist you with choosing the best option for you.

Myth #2: Real estate agent fees are expensive.

In the age of online real estate listings at your fingertips, buyers are tempted to find a home on their own and save money by doing it. Buyers usually don’t pay a real estate agent’s commission. Your agent’s commission is paid from the proceeds of the sale via the seller. Why not hire an agent whose guidance is no cost to you? Having an agent means having a pro in your corner. They can help you stay in your budget, find listings that fit your needs that aren’t online, assist you in making the right offer, negotiate with the seller’s agent, and spend countless hours working on your behalf.

Myth #3: Don’t contact a real estate agent until you’re ready to buy.

An agent will be happy to work with you before you’re ready to buy and that means helping you figure out when the time is right for you. An agent can set up an automated Multiple Listing Service (MLS) search so you can get notifications for every listing that meets your criteria as soon as it hits the market. Sites like Zillow and Trulia are syndicated directly from the MLS, so the information on those sites are not always up-to-date. Your agent will walk you through the homebuying process from A to Z and can help you set realistic expectations. A good agent can also refer you to a good mortgage lender. Your lender will never discuss your financial situation with your agent.

Myth #4: You’ll save more money buying a fixer-upper.

Unless you’re a general contractor or have construction experience, there’s a good chance you won’t be able to identify all the work that is needed for a fixer-upper. While the upfront costs of a fixer-upper is more budget friendly, there could be hidden costs once you start tearing down walls. HGTV shows have glamorized the renovation process, but the truth is, a fixer-upper is far from glamorous.

Myth #5: Your only upfront cost is your down payment.

In some cases, buyers think their down payment is the only money they’ll spend during the home buying process. Hiring an inspector after your offer is accepted is the first out-of-pocket expense. The cost of a home inspection can vary depending on where the home is located. Next, your lender will require an appraisal which the buyer pays for. At closing, there is the down payment and there are closing costs that must be paid to finalize your home purchase. Closing costs are typically anywhere from 2%-4% of the total purchase price of the home. This amount includes the cost for items like homeowners insurance, title fees, and more.

Myth #6: Your credit score needs to be in the 700s or higher to buy a house.

A high credit score helps immensely especially when you see an advertised interest rate. However, don’t let a lower credit score stop your dream of owning a home. There are loans available for buyers with lower credit scores, although some of those loans come with additional fees you will need to pay. It’s always best to speak to a mortgage lender or mortgage broker so they can help navigate the options that are best for you.

Myth #7: You’re still paying off student loans so that means you don’t qualify for a mortgage.

Paying off your student loan is not a requirement for approval on a mortgage loan. Lenders look at how much debt you already have and compare it to your pre-tax income. This is called your debt-to-income ratio. A lender wants to make sure that you will be able to afford your monthly mortgage payments along with your other existing payments. There are different types of debt-to-income ratios and not all mortgage lenders calculate them the same way.

Myth #8: You should base your budget on your pre-approved amount by your lender.

Getting pre-approved by a lender can help you gauge what you can afford as a homebuyer. Keep in mind, a pre-approval is not a budget. Lenders tend to approve for the highest amount they think you can afford, but that doesn’t mean that’s how much you should borrow. We recommend thinking about what your monthly payment goal is and include your principal, interest, taxes, and insurance. There are homeownership expenses that are not part of your monthly payments, such as utilities, garbage pick-up, HOA dues (for condos and townhomes) and costs of maintenance. Consider the full scope of your expenses when determining your budget.

Myth #9: It’s all about location, location, location.

I know you’re asking yourself ‘is this a myth?’ The answer is: Yes and no. Location is a complex equation. We encourage buyers to research neighborhoods before they start looking at houses. Know your school districts by visiting Consider how far you’re willing to commute. What are your lifestyle goals? Buyers want an area with great resale potential, however, a less sought after neighborhood might mean lower property taxes. Your agent can go over all of these factors with you as they are the expert at monitoring buying and selling trends.

Myth #10: Don’t settle for a home that doesn’t check every single box on your wishlist.

A ‘dream home wishlist’ can be a great starting point for figuring out what you want and what your deal breakers are. Compromise is an important part of buying a home. Prioritize what is most important to you. A good real estate agent will be able to look at your wishlist and find properties that might work for you. The decision is yours to make and having realistic expectations will start the process off on the right foot.

We Can Help

Are you a soon-to-be first time homebuyer or have questions? Contact us today to schedule a free, no-obligation consultation. The homebuying process is a journey and we’re here to help you navigate it until you reach the finish line.