As a first-time homebuyer, you may feel like there is endless information out there on how to buy a home. You’ve probably heard advice about how much you need for a down payment, what your credit score is to qualify for a mortgage, or whether you’re better off renting. These home buying myths can be holding you back from becoming a homeowner.
This Redfin article debunks 11 common first-time homebuyer myths so you can understand what’s really standing between you and homeownership. Whether you’re considering a home in Nashville, Tennessee, or a condo in Chicago, Illinois, here’s the truth about buying your first home.
Myth #1: 20% down payment required
You don’t need a 20% down payment to buy a house. It’s a common myth that may be preventing you from becoming a homeowner. Many loan programs allow you to purchase with little or no down payment.
FHA Loans: Minimum 3.5% reduction VA Loans: 0% reduction USDA Loans: 0% reduction Conventional Loans: 3-5% reduction (depending on lender)
Keep in mind that for conventional loans, you’ll need to factor private mortgage insurance (PMI) into your budget. PMI is an additional cost that mortgage lenders require if your down payment is less than 20%, and the cost is factored into your monthly mortgage payment.
There are also down payment assistance programs that offer loans and grants that can reduce your down payment and closing costs. Down payment assistance programs are offered at the local, state, and federal levels, so there are many programs available.
Myth #2: It’s cheaper to rent than buy a home.
Renting isn’t always cheaper than buying a home. However, it depends on several factors. In some cities, the average rent can be as much or more than your mortgage payment. Mortgage payments are stable over time, but rent can increase each year.
Additionally, if you plan to stay in a city for more than five years, buying a home can provide more stability and generate more equity in the long run. The Rent and Buy Calculator allows you to estimate the difference in costs in your city.
Myth #3: You only need to save for a down payment.
The down payment isn’t the only upfront cost you can save by not paying 20% as a down payment. Additional costs such as closing costs, agent fees, inspections, and moving costs should be considered.
Closing costs: 2% to 5% of purchase price Brokerage fees: 1.5% to 3% of purchase price
For example, the median sales price for a single-family home in September 2025 was $435,495. In this scenario, average closing costs could range from $8,709 to $21,774. Agent fees can range from $6,532 to $13,064.
In some cases, the seller may be willing to pay some of the closing costs and real estate agent’s fees, but this is 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 your 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. This tells the lender what percentage of your monthly income will go toward debt.
If your DTI is less than 36%, you are in a good position to buy a home, even with student loans. Most lenders will not approve a mortgage if your DTI is over 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 a great credit score to buy a home. Having a higher credit score can help expand your loan options and can sometimes provide you with lower interest rates and better loan terms. However, you don’t need a perfect credit score to buy your first home.
Here are some credit score guidelines for specific 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
Even if your score isn’t ideal yet, you can work with your lender to find the best score and create a plan to improve it over time.
Myth #6: You shouldn’t buy when interest rates are high.
High interest rates don’t necessarily have to prevent you from buying a home if now is the right time for you. Interest rates can go up or down, and so can home prices and inventory.
If you’ve found the right home and are financially ready, it makes 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 interest rate.
It is a common misconception that all mortgage lenders offer the same interest rates and terms. In reality, each financial institution uses different criteria to determine interest rates, and even small differences can have a large impact over time. When shopping for a mortgage, it’s a good idea to get quotes from multiple lenders. That way, you can find the one that best suits your finances and homeownership goals.
Myth #8: Pre-approval means the loan will be approved
A mortgage pre-approval shows sellers that you are a serious buyer, but it does not guarantee that your loan will be approved. Lenders can also deny your application if there’s been a change in your income, credit score, home appraised value, or anything else.
Pre-approval is an important first step, but continue to manage your finances carefully until you build your home.
Myth #9: You don’t need an agent
Technically speaking, it is possible to buy a home without an agent. However, a good real estate agent can make the process smoother and avoid costly mistakes.
From helping you find the right home to making an offer that stands out, a great real estate agent will be your advocate throughout the process. They are also knowledgeable about the local market and can spot potential problems early on, which is especially helpful for first-time buyers.
Myth #10: Home inspections are optional.
Whether you are purchasing a home with a loan or cash, it is important to have a home inspection done. Mortgage lenders often require a home inspection before you purchase a home. Even if your lender doesn’t require a home inspection, it doesn’t mean you should skip it.
A qualified home inspector may discover damage or problems in your home that you should be aware of before taking possession of the property. If a home inspection reveals significant damage, you may be able to negotiate with the seller to repair the problems, negotiate a lower asking price, or even move out if an inspection is required.
Myth #11: Listing price is non-negotiable
Listed prices are just a starting point. You can always negotiate your offer, whether it’s the price of the home or asking for concessions from the seller. In a competitive market, you may have to be prepared to spend more than list price, but your agent will know how to make your offer stand out. If the market is slow, it may be easier to negotiate the price. It’s important to keep in mind that the purchase price can go up or down depending on market conditions, buyer interest in the home, and other factors.
Next steps for first-time home buyers
Don’t let the myths about home buying hold you back from purchasing your first home. If you still have questions about your finances or your ability to buy a home, talk to a real estate agent, lender, or financial advisor who can help you get started on your home buying journey. You may find that you’re ready to buy a home sooner than you thought.
