As a first-time homebuyer, it could possibly really feel like there’s countless details about how one can purchase a house. You’ve most likely heard recommendation about how a lot you want for a down fee, what credit score rating qualifies you for a mortgage, or whether or not it’s higher to maintain renting as an alternative. It’s potential these house shopping for myths could also be holding you again from changing into a home-owner.
On this Redfin article, we’ll debunk 11 frequent first-time homebuying myths so you’ll be able to see what’s actually standing between you and homeownership. Whether or not you’re houses in Nashville, TN, or a apartment in Chicago, IL, right here’s the reality about shopping for your first house.
Fable #1: You want a 20% down fee
You don’t want a 20% down payment to purchase a house. It’s a standard delusion that may be stopping you from changing into a home-owner. Many mortgage applications permit you to purchase with little or no cash down.
- FHA loans: As little as 3.5% down
- VA loans: 0% down
- USDA loans: 0% down
- Standard loans: 3 – 5% down, relying on the lender
For standard loans, consider you’ll must issue non-public mortgage insurance coverage (PMI) into your price range. PMI is an extra price your mortgage lender might require in case your down fee is under 20% and the fee is factored into your month-to-month mortgage fee.
There are additionally down fee help applications that supply loans or grants that may cut back your down fee quantity or closing prices. Down fee help applications are supplied at native, state, and federal ranges, so there are many applications obtainable.
Fable #2: Renting is cheaper than shopping for a house
Renting isn’t at all times cheaper than shopping for a house; nonetheless, it will depend on a number of components. In some cities, the typical hire could also be equal to or greater than a mortgage fee. Mortgage funds are steady over time, whereas your hire might improve every year.
Moreover, when you plan to remain in a metropolis for greater than 5 years, shopping for a house can present extra stability and generate extra fairness in the long term. You need to use a hire vs purchase calculator to assist estimate the distinction in prices in your metropolis.
Fable #3: You solely want to avoid wasting for a down fee
Even when you’re not placing down 20%, a down fee isn’t the one upfront price to avoid wasting for. You’ll must account for extra bills like closing prices, agent charges, inspections, and transferring prices.
- Closing prices: 2 – 5% of the acquisition worth
- Agent charges: 1.5 – 3% of the acquisition worth
For instance, the median sale worth for a single-family house in September 2025 was $435,495. In that situation, the typical closing prices may vary from $8,709 to $21,774. Agent charges may vary from $6,532 to $13,064.
Typically, the vendor might cowl a portion of the closing prices or the actual property agent’s charges, however that’s not assured. You’ll want to issue these further prices into your price range.
>>Learn: How A lot Cash Do I Must Purchase a Home?
Fable #4: It’s essential repay your pupil loans first
You don’t should repay pupil loans earlier than shopping for a house, all of it will depend on your debt-to-income ratio (DTI). DTI is your month-to-month debt funds divided by your gross revenue. It reveals lenders what share of your month-to-month revenue is paid in direction of your money owed.
In case your DTI is under 36%, you’re typically in an excellent place to purchase a house even with pupil debt. Most lenders received’t approve a mortgage in case your DTI is greater than 36%. So when you fall into that class, you might need to repay your pupil loans first.
Fable #5: Your credit score rating must be good
You don’t want a wonderful credit score rating to purchase a home. Having the next credit score rating might help widen your mortgage choices and presumably provide you with a decrease rate of interest and higher mortgage phrases. Nonetheless, you don’t want an ideal credit score rating to be able to purchase your first house.
Listed here are among the credit score rating tips for sure mortgage sorts:
- Standard mortgage: 620
- FHA mortgage: 580 (or 500 with 10% down fee)
- VA mortgage: No requirement, however some lenders want 620
- USDA mortgage: 620 – 640
In case your rating isn’t perfect but, you’ll be able to nonetheless work with a lender to search out the very best match and create a plan to enhance it over time.
Fable #6: You shouldn’t purchase when rates of interest are excessive
If now could be the correct time for you, the next rate of interest shouldn’t essentially cease you from shopping for a house. Charges rise and fall, however house costs and stock can change too.
If you happen to discover the correct house and also you’re financially prepared, it could possibly nonetheless make sense to purchase now. If rates of interest drop sooner or later, you’ll be able to at all times think about refinancing your mortgage.
Fable #7: All mortgage lenders supply the identical charge
It’s a standard false impression that each mortgage lender gives the identical charges and phrases. In actuality, every lender makes use of completely different standards to find out your charge, and even small variations can have a huge impact over time. When purchasing for a mortgage, it’s at all times a good suggestion to get quotes from a number of lenders. That means, yow will discover the one which’s greatest suited in your funds and homeownership objectives.
Fable #8: A pre-approval means your mortgage can be authorized
A mortgage pre-approval reveals sellers you’re a severe purchaser, but it surely doesn’t assure your mortgage can be authorized. Lenders can nonetheless deny an utility if one thing adjustments – like your revenue, credit score rating, or the house’s appraised worth.
Pre-approval is a vital first step, however proceed managing your funds fastidiously till you shut on the house.
Fable #9: You don’t want an agent
Technically, you should buy a house with out an agent. Nonetheless, an important actual property agent could make the method smoother and assist you to keep away from expensive errors.
From serving to you discover the correct house to creating a suggestion that stands out, an important actual property agent is your advocate all through your complete course of. In addition they know the native market and may spot potential points early on, which is particularly useful for first-time patrons.
Fable #10: House inspections are elective
It’s vital to get a house inspection, no matter whether or not you’re shopping for the house with a mortgage or with money. As a rule, your mortgage lender would require a house inspection before you purchase the house. Even when your lender doesn’t require a house inspection, it doesn’t imply you must skip it.
A licensed house inspector might uncover injury or points with the home that try to be conscious of earlier than proudly owning the property. If a house inspection does discover important injury, you might be able to negotiate with the vendor to restore the problems, negotiate a decrease asking worth, or stroll away in case you have an inspection contingency.
Fable #11: The itemizing worth is non-negotiable
The itemizing worth is simply a place to begin. You possibly can at all times negotiate a suggestion, whether or not it’s the house’s worth or asking for vendor concessions. In a aggressive market, you might have to be ready to spend greater than the itemizing worth, however your agent will know how one can make your supply stand out. If it’s a slower market, you might be able to negotiate the worth extra simply. It’s vital to remember that the acquisition worth can rise or fall relying on market circumstances, purchaser curiosity within the house, and different components.
Subsequent steps for first-time house patrons
Don’t let house shopping for myths maintain you again from shopping for your first house. If you happen to nonetheless have questions on your funds or capability to purchase a house, communicate with an actual property agent, lender, or monetary advisor who might help you begin your house shopping for journey. You might discover out you’re prepared to purchase a house prior to you thought.
