Buying a home often invites plenty of outside opinions. Some are helpful, others outdated, and some can unintentionally hold you back. Maybe you’ve heard advice from a family member, seen a viral video on social media, or picked up a “rule” that sounds right but doesn’t quite match today’s market.
This is completely normal. But the mortgage world changes, and the guidance we grew up with doesn’t always change with it. As you plan out your 2026, this is the perfect time to leave a few long-standing mortgage myths behind.
Clearing up misconceptions and challenging conventional wisdom can help you feel more confident, prepared, and in control of your next steps throughout the mortgage process.
In this article, we break down some of the most common mortgage myths homebuyers bring into the process and explain why they’re misguided. By the end, you’ll be more prepared to question homebuying myths and embrace mortgage facts.
Mortgage Myth #1: “You need a 20% down payment to buy a home.”
This is one of the most common beliefs buyers bring into the homebuying process, and it’s also one of the biggest reasons many people delay their plans longer than they may need to. The idea that you must put 20% down has been repeated for years and years, often by well-meaning friends or family members who bought their homes in a very different market.
The Truth: Many homebuyers put down far less than 20%.
Depending on the type of loan, your finances, and your long-term goals, your down payment could be significantly lower than 20%. Some programs are designed specifically to help buyers get into a home with a less robust upfront investment. Other programs, like a Veterans Affairs (VA) loan or United States Department of Agriculture (USDA) loan, can help eligible borrowers get a mortgage without a down payment.
So, why does the 20% number stick around? Well, one reason is that a 20% down payment is tied to avoiding private mortgage insurance (PMI). Over time, though, it became a “rule” instead of just one option.
Your down payment should fit your financial picture, not someone else’s expectations. The most important step is understanding your options and your goals so you can make a confident, informed choice.
Mortgage Myth #2: “You must have perfect credit to qualify.”
Another myth that follows many buyers into the mortgage process is the belief that only those with flawless credit scores can get approved for a loan. This can be an intimidating idea, and for some, it’s enough to stop them from even exploring their options.
The Truth: You don’t necessarily need perfect credit to buy a home.
Different loan programs are designed to support buyers with a wide range of credit histories. Lenders will look at the full picture of your financial profile, not just a single number. That includes your income, debt, savings, and overall financial stability. Your credit score matters, but it’s just one part of a much larger story.
This myth sticks around in part because credit scores can feel mysterious, and online information often oversimplifies what “good credit” looks like. It’s easy to assume the bar is higher than it really is.
But you don’t need perfection. Understanding where your credit stands, what factors influence it, and how lenders evaluate your financial profile can help you find a path to homeownership that fits your situation.
If your credit score isn’t where you want it yet, that’s okay. You can also take some extra time to work on your credit score before diving into the homebuying process.
Mortgage Myth #3: “The lowest interest rate is always the best loan.”
It’s totally natural to focus on interest rates. After all, they’re usually the headline-grabbing mortgage number everyone talks about. But choosing a mortgage based on the lowest rate alone is not always the best option for every situation.
The Truth: The best loan isn’t always the one with the lowest rate.
Your decision on which mortgage to pick is made up of many moving parts: loan terms, closing costs, monthly payments, upfront fees, and how long you plan to stay in the home. A slightly lower rate might come with higher expenses elsewhere, while a loan with a slightly higher rate may better align with your financial goals. It all depends on your situation.
So, why do so many of us put a sometimes-outsized focus onto mortgage interest rates? Rates are easy to compare, and they make for quick conversation, much easier than talking about loan structures or personal timelines. But focusing on a single number can leave out the bigger picture.
Think about the loan as a whole, not just the rate. The right option should balance affordability and long-term comfort, among other personal factors.
Mortgage Myth #4: “It’s better to wait until rates drop.”
When rates rise, it’s common to hear advice like “just wait it out” or “buy when rates go back down.” It sounds logical, but it also may be oversimplifying a complex decision.
The Truth: Waiting for the “perfect” rate can mean missing important opportunities.
As I said above, interest rates are only one piece of the homebuying puzzle. Home prices, local competition, your savings, your credit, and your long-term goals all shape whether the timing is right. While rates may shift over time, it’d be very difficult to know exactly when and by how much they’ll change.
Homebuying isn’t one-size-fits-all, and waiting for a moment that’s impossible to pinpoint can create additional stress. The “right time” to buy is personal. Focus on readiness with your budget, stability, and long-term plans instead of guessing when the market will be “ready.” A home is a long-term investment, and rates can be revisited down the line, but time spent waiting can’t be reclaimed.
Mortgage Myth #5: “You should always waive contingencies to win a home.”
In a competitive market, you may hear stories of buyers removing inspection or appraisal contingencies to stand out more to sellers. It can make it seem like the only way to have your offer taken seriously is to take on extra risk.
The Truth: Contingencies exist to protect you, not hold you back.
An inspection helps you understand the condition of the home. An appraisal ensures you’re not overpaying. These safeguards are designed to help you make informed decisions and hopefully prevent costly surprises.
Still, in fast-moving markets, dramatic strategies get a lot of attention. But what you don’t always hear about are the added costs or stress that can follow when important protections are removed. A strong offer doesn’t have to mean sacrificing your peace of mind.
Now, if you are comfortable waiving contingencies, you can certainly consider that. But it’s absolutely possible to be competitive and thoughtful. Contingencies should be approached as tools to help you make the best decision for your future home.
Mortgage Myth #6: “Pre-qualification and pre-approval are the same thing.”
These two terms sound similar, and they’re often used interchangeably in everyday conversation. That can lead many buyers to believe they have the same function in the mortgage process, but they don’t.
The Truth: Pre-qualification and pre-approval serve different purposes at different stages in the process
Pre-qualification gives you a general idea of what you might be able to borrow based on information you provide. Pre-approval goes a bit deeper. It includes a more thorough financial review, which gives sellers a clearer signal that you’re ready and able to move forward.
This mortgage myth has stuck around because the words feel interchangeable, and some online sources blur the lines. But in a competitive market, the distinction matters.
Think of pre-approval as your head start. It helps you understand your buying power more accurately and strengthens your position when making an offer. Pre-qualification can be a helpful first step, but pre-approval brings you closer to being truly prepared.
Mortgage Myths Busted!
Myths tend to linger because they sound simple and sometimes even comforting. But when it comes to buying a home, outdated or misguided assumptions can create unnecessary stress or make the process feel harder than it truly is. Once you understand what’s a mortgage fact and what’s fiction, the path forward feels far more approachable.
As you prepare for homeownership in 2026, remember, you’re not expected to know every detail of the mortgage process. Most people don’t. What matters is being open to learning, asking questions, and surrounding yourself with guidance that’s grounded in today’s reality.
Leave the myths back in 2025, and take your next step knowing that every bit of knowledge you gain can bring you closer to a home that fits your life and your goals.
Disclaimer: The United States Department of Agriculture Rural Development (USDA-RD) Single Family Housing Guaranteed Loan Program assists approved lenders in providing low to moderate income households purchase or build homes in rural areas subject to eligibility requirements. The maximum loan amount an applicant may qualify for will depend on the applicant’s repayment ability. The applicant’s ability to repay a loan considers various factors such as income, debts, and assets. Regardless of repayment ability, applicants may never borrower more than the area’s loan limit (plus certain costs allowed to be financed) for the county in which the property is located. Eligible borrowers can receive 100% financing without private mortgage insurance.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
