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8 Mortgage Myths That Homebuyers Need to Know

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Buying a home is one of the biggest decisions you’ll ever make, and it’s important to have all the facts before you commit.

There are a lot of myths out there about mortgages, and it can be hard to know what’s true and what’s not.

We’re here to help. We’ve debunked eight of the most common mortgage myths so that you can make an informed decision about your home purchase.

If you’re a first-time homebuyer, the prospect of buying your first property can be daunting.

There are so many things to think about:

  • how much money do you need for a downpayment
  • how much house you can afford based on your salary
  • and what mortgage rate will give you the most bang for your buck.

All that information is scattered all over the place and it’s hard to know where to start. Luckily, I’m here with 8 Mortgage Myths That Homebuyers Need To Know!

These tips should help make buying your first home easier and more enjoyable than ever before!

What are some of those myths? Read on…

Myth 1: You Need A 20% Down Payment To Buy A House

This is one of the most common mortgage myths out there. A lot of people think that they need to put down a huge chunk of money in order to buy a house, but that’s not necessarily true.

In fact, you can put down as little as 3% of the purchase price and still get a mortgage. Some lenders even offer programs for first-time homebuyers that allow you to put down less than 3%.

Of course, putting down more money will lower your monthly payments and help you build equity in your home faster.

But if you don’t have a lot of money saved up, don’t worry – you can still become a homeowner.

Myth 2: You Need Perfect Credit To Get A Mortgage

Your credit score is important, but it’s not the be-all and end-all when it comes to getting a mortgage.

There are programs available for people with less-than-perfect credit, and even if you don’t qualify for one of those programs, your credit score isn’t the only factor that lenders look at.

They’ll also take into account your employment history, income, and debt-to-income ratio.

So even if your credit isn’t perfect, you may still be able to get a mortgage.

Myth 3: Mortgage Rates Are At An All-Time Low, So Now Is The Time To Buy

Mortgage rates are indeed at historic lows right now. But that doesn’t mean that they’re going to stay there forever.

Rates are unpredictable and can change at any time, so if you’re thinking about buying a house, it’s best to do it sooner rather than later.

Waiting to see if rates go down even further could end up costing you more in the long run.

Myth 4: You Need A 15- Or 30-Year Mortgage

The majority of homebuyers choose either a 15- or 30-year mortgage. But did you know that there are other options available?

For example, you could get a 5-, 7-, or 10-year adjustable-rate mortgage (ARM). With an ARM, your interest rate is fixed for a certain period of time and then it adjusts annually after that.

ARMs usually start with a lower interest rate than fixed-rate mortgages, so they can save you money in the short term.

But they’re riskier because if rates go up, your monthly payments will increase as well.

Whether or not an ARM is right for you depends on your individual circumstances. It’s something to talk to your lender about before making a decision.

Myth 5: You Shouldn’t Bother Getting Pre-Approved For A Mortgage

If you’re serious about buying a house, you should get pre-approved for a mortgage before you start looking at properties.

Pre-approval means that a lender has looked at your financial information and decided how much money they’re willing to lend you. This is different from pre-qualification, which is when a lender gives you an estimate of how much you could borrow based on the information you give them.

Pre-approval gives you a firm number that you can use when bidding on properties.

It also shows sellers that you’re a serious buyer, which could give you an edge over other offers.

Myth 6: All Mortgages Are The Same

Mortgages may seem like a one-size-fits-all product, but there are actually many different types available.

For example, there are fixed-rate mortgages and adjustable-rate mortgages (ARMs), as well as government-backed loans like FHA loans and VA loans.

Each type of mortgage has its own set of pros and cons, so it’s important to do your research and choose the one that’s right for you.

Myth 7: If You Have A Low Credit Score, You Can’t Get A Mortgage

Your credit score is important, but it’s not the only factor that lenders consider when approving a mortgage.

Lenders will also take into account your employment history, income, and debt-to-income ratio. So even if your credit isn’t perfect, you may still be able to get approved for a loan.

There are also programs available for people with less-than-perfect credit, such as FHA loans and VA loans.

Let's PLAN your FUTURE!

If you're considering buying your first property in Canada, be sure to contact us or book your Free 15 minutes call with us, This will help you prepare better for that big decision!

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Serujan Kaneshalingam

Serujan Kaneshalingam

Dedicated Mortgage Broker with One Mission: To help clients obtain the best financing solution for the acquisition or refinancing of your property.

Serujan Kaneshalingam

Serujan Kaneshalingam

Dedicated Mortgage Broker with One Mission: To help clients obtain the best financing solution for the acquisition or refinancing of your property.

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