As a first-time homebuyer, it can feel like there’s endless information about how to buy a home. You’ve probably heard advice about how much you need for a down payment, what credit score qualifies you for a mortgage, or whether it’s better to keep renting instead. It’s possible these home buying myths may be holding you back from becoming a homeowner.
In this Redfin article, we’ll debunk 11 common first-time homebuying myths so you can see what’s really standing between you and homeownership. Whether you’re looking at homes in Nashville, TN, or a condo in Chicago, IL, here’s the truth about buying your first home.
Myth #1: You need a 20% down payment
You don’t need a 20% down payment to buy a home. It’s a common myth that might be preventing you from becoming a homeowner. Many loan programs allow you to buy with little or no money down.
- FHA loans: As low as 3.5% down
- VA loans: 0% down
- USDA loans: 0% down
- Conventional loans: 3 – 5% down, depending on the lender
For conventional loans, keep in mind you’ll need to factor private mortgage insurance (PMI) into your budget. PMI is an additional cost your mortgage lender may require if your down payment is below 20% and the cost is factored into your monthly mortgage payment.
There are also down payment assistance programs that offer loans or grants that can reduce your down payment amount or closing costs. Down payment assistance programs are offered at local, state, and federal levels, so there are plenty of programs available.
Myth #2: Renting is cheaper than buying a home
Renting isn’t always cheaper than buying a home; however, it depends on several factors. In some cities, the average rent may be equal to or more than a mortgage payment. Mortgage payments are stable over time, whereas your rent may increase each year.
Additionally, if you plan to stay in a city for more than 5 years, buying a home can provide more stability and generate more equity in the long run. You can use a rent vs buy calculator to help estimate the difference in costs for your city.
Myth #3: You only need to save for a down payment
Even if you’re not putting down 20%, a down payment isn’t the only upfront cost to save for. You’ll need to account for additional expenses like closing costs, agent fees, inspections, and moving costs.
- Closing costs: 2 – 5% of the purchase price
- Agent fees: 1.5 – 3% of the purchase price
For example, the median sale price for a single-family home in September 2025 was $435,495. In that scenario, the average closing costs could range from $8,709 to $21,774. Agent fees could range from $6,532 to $13,064.
Sometimes, the seller may cover a portion of the closing costs or the real estate agent’s fees, but that’s not guaranteed. Be sure to factor these additional costs into your budget.
>>Read: How Much Money Do I Need to Buy a House?
Myth #4: You need to pay off your student loans first
You don’t have to pay off student loans before buying a home, it all depends on your debt-to-income ratio (DTI). DTI is your monthly debt payments divided by your gross income. It shows lenders what percentage of your monthly income is paid towards your debts.
If your DTI is below 36%, you’re generally in a good position to buy a home even with student debt. Most lenders won’t approve a mortgage if your DTI is higher than 36%. So if you fall into that category, you may want to pay off your student loans first.
Myth #5: Your credit score needs to be perfect
You don’t need an excellent credit score to buy a house. Having a higher credit score can help widen your loan options and possibly give you a lower interest rate and better loan terms. However, you don’t need a perfect credit score in order to buy your first home.
Here are some of the credit score guidelines for certain loan types:
- Conventional loan: 620
- FHA loan: 580 (or 500 with 10% down payment)
- VA loan: No requirement, but some lenders prefer 620
- USDA loan: 620 – 640
If your score isn’t ideal yet, you can still work with a lender to find the best fit and create a plan to improve it over time.
Myth #6: You shouldn’t buy when interest rates are high
If now is the right time for you, a higher interest rate shouldn’t necessarily stop you from buying a home. Rates rise and fall, but home prices and inventory can change too.
If you find the right home and you’re financially ready, it can still make sense to buy now. If interest rates drop in the future, you can always consider refinancing your mortgage.
Myth #7: All mortgage lenders offer the same rate
It’s a common misconception that every mortgage lender offers the same rates and terms. In reality, each lender uses different criteria to determine your rate, and even small variations can have a big impact over time. When shopping for a mortgage, it’s always a good idea to get quotes from several lenders. That way, you can find the one that’s best suited for your finances and homeownership goals.
Myth #8: A pre-approval means your loan will be approved
A mortgage pre-approval shows sellers you’re a serious buyer, but it doesn’t guarantee your loan will be approved. Lenders can still deny an application if something changes – like your income, credit score, or the home’s appraised value.
Pre-approval is an important first step, but continue managing your finances carefully until you close on the home.
Myth #9: You don’t need an agent
Technically, you can buy a home without an agent. However, a great real estate agent can make the process smoother and help you avoid costly mistakes.
From helping you find the right home to making an offer that stands out, a great real estate agent is your advocate throughout the entire process. They also know the local market and can spot potential issues early on, which is especially helpful for first-time buyers.
Myth #10: Home inspections are optional
It’s important to get a home inspection, regardless of whether you’re buying the home with a loan or with cash. More often than not, your mortgage lender will require a home inspection before you buy the home. Even if your lender doesn’t require a home inspection, it doesn’t mean you should skip it.
A licensed home inspector may uncover damage or issues with the house that you should be aware of before owning the property. If a home inspection does find significant damage, you may be able to negotiate with the seller to repair the issues, negotiate a lower asking price, or walk away if you have an inspection contingency.
Myth #11: The listing price is non-negotiable
The listing price is just a starting point. You can always negotiate an offer, whether it’s the home’s price or asking for seller concessions. In a competitive market, you may need to be prepared to spend more than the listing price, but your agent will know how to make your offer stand out. If it’s a slower market, you may be able to negotiate the price more easily. It’s important to keep in mind that the purchase price can rise or fall depending on market conditions, buyer interest in the home, and other factors.
Next steps for first-time home buyers
Don’t let home buying myths hold you back from buying your first home. If you still have questions about your finances or ability to buy a home, speak with a real estate agent, lender, or financial advisor who can help you start your home buying journey. You may find out you’re ready to buy a home sooner than you thought.
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