Mortgage Myths Debunked: What You Need to Know Before Borrowing


Mortgage Myths Debunked What You Need to Know Before Borrowing


So, you’re thinking about getting a mortgage? Congratulations! Buying a home is a significant milestone in life, but it can also be a bit overwhelming. There are so many myths and misconceptions floating around that it’s easy to get confused. But fear not! In this article, we will debunk some common mortgage myths, provide you with valuable insights, and, of course, add a touch of humor to make the journey more enjoyable.

Mortgage Myths Debunked What You Need to Know Before Borrowing


You Need a Perfect Credit Score

Many believe that you must have a flawless credit score to secure a mortgage. While a higher credit score can certainly help, it’s not the be-all and end-all. Lenders consider various factors, including your income, employment history, and debt-to-income ratio. So, even if your credit isn’t perfect, you can still qualify for a mortgage.

A 20% Down Payment Is Mandatory

The 20% down payment myth has deterred many aspiring homeowners. While putting down 20% can help you avoid private mortgage insurance (PMI), it’s not the only option. There are various loan programs that require lower down payments, sometimes as low as 3%. So, don’t let the down payment myth hold you back.

Fixed-Rate Mortgages Are Always Better

Fixed-rate mortgages provide stability, but they might not always be the best choice. If you plan to move or refinance in a few years, an adjustable-rate mortgage (ARM) with a lower initial interest rate could save you money. It’s essential to consider your long-term plans and financial situation when choosing a mortgage type.

Pre-Qualification Equals Guaranteed Approval

Pre-qualification is a helpful step in the mortgage process, but it doesn’t guarantee approval. It’s based on preliminary information you provide to the lender. To secure a mortgage, you’ll need to go through the pre-approval process, which involves a more thorough review of your financial situation. So, don’t count your chickens before they hatch!

You Can’t Get a Mortgage with Student Loans

Many believe that having student loans makes it impossible to get a mortgage. While student loans can affect your debt-to-income ratio, they don’t automatically disqualify you. Lenders look at the full picture, including your income and credit history. So, don’t let your student loans hold you back from homeownership.

All Lenders Offer the Same Rates

Not all lenders are created equal. Mortgage rates can vary from one lender to another, so it pays to shop around. Get quotes from multiple lenders and compare the terms and rates to find the best deal. Your wallet will thank you.

You Should Pay Off All Your Debts Before Applying

While reducing your debt is a good idea, you don’t have to be completely debt-free to get a mortgage. Lenders look at your debt-to-income ratio, so having some manageable debt isn’t necessarily a deal-breaker. Focus on improving your financial health, but don’t feel pressured to eliminate every penny of debt.

The Lowest Interest Rate Is Always the Best

While a low interest rate is appealing, it’s not the only factor to consider. Sometimes, mortgages with lower rates come with higher fees or restrictions. You should evaluate the entire loan package to determine what works best for your financial situation.

You Can’t Refinance If You Have Bad Credit

Refinancing can be an excellent way to lower your monthly payments or pay off your mortgage faster. Even if your credit isn’t pristine, you may still be able to refinance. Some lenders offer programs for borrowers with less-than-perfect credit. It’s worth exploring your options.

You Need to Borrow the Full Amount You’re Approved For

Just because a lender approves you for a specific amount doesn’t mean you have to borrow the full sum. Borrow only what you need and can comfortably repay. Overextending yourself financially is never a good idea.


Navigating the world of mortgages can be tricky, but armed with the right information, you can make informed decisions and avoid falling for common myths. Remember that everyone’s financial situation is unique, so what works for one person may not work for another. Don’t be afraid to seek advice from a qualified mortgage professional to find the best mortgage solution for you.


  1. Is it true that you need a 20% down payment to avoid PMI?
    • No, while a 20% down payment can help you avoid private mortgage insurance, there are loan programs with lower down payment requirements.
  2. Can I get a mortgage with a less-than-perfect credit score?
    • Yes, you can still qualify for a mortgage with a less-than-perfect credit score. Lenders consider various factors when making lending decisions.
  3. Should I always choose a fixed-rate mortgage?
    • Not necessarily. Your choice of mortgage type should align with your long-term financial goals and plans.
  4. Is it true that I can’t refinance with bad credit?
    • You may still be able to refinance with less-than-ideal credit. Explore refinancing options with different lenders.
  5. Do I have to borrow the full amount I’m approved for?
    • No, you should only borrow what you need and can comfortably repay. Borrowing more than necessary can lead to financial strain.