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  • Writer's pictureRicky Gandhi

Mortgage Myths Busters: Debunking.....


Mortgage Myths #1: You Need a Perfect Credit Score

Mortgage Myths #2: A 20% Down Payment is Required

Mortgage Myths #3: Fixed-Rate Mortgages Are Always the Best Option

Mortgage Myths #4: Refinancing is Always a Money-Saver

Mortgage Myths #5: Prequalification Guarantees Loan Approval

Mortgage Myths #6: You Can't Get a Mortgage with Student Loan Debt

Mortgage Myths #7: Adjustable-Rate Mortgages Are Risky

Mortgage Myths #8: You Must Pay Off All Your Debts Before Applying



The mortgage process can be a labyrinth of confusion for many prospective homebuyers. It's rife with myths and misconceptions that can leave you feeling overwhelmed and misinformed. In this comprehensive guide, we will debunk some of the most persistent mortgage myths and provide you with the knowledge you need to make informed decisions about one of the most significant financial commitments in your life.

Myth #1: You Need a Perfect Credit Score

One of the most enduring myths is the belief that you must have a flawless credit score to secure a mortgage. While a higher credit score can improve your chances of getting favorable loan terms, it's not an absolute requirement. Lenders offer various mortgage programs, some of which cater to borrowers with less-than-perfect credit scores. It's essential to understand that you don't need a perfect 850 credit score to qualify for a home loan.

Myth #2: A 20% Down Payment is Required

Many people believe that a 20% down payment is a non-negotiable prerequisite for buying a home. While a substantial down payment can lead to better loan terms and lower monthly payments, it's not always necessary. There are mortgage options available that require as little as 3% down payment. However, keep in mind that a lower down payment may result in higher monthly mortgage insurance costs.

Mortgage Myths Busters: Debunking

Myth #3: Fixed-Rate Mortgages Are Always the Best Option

Fixed-rate mortgages provide stability with constant monthly payments, making them a popular choice. However, they are not always the best option for everyone. Adjustable-rate mortgages (ARMs) offer lower initial interest rates, which can be advantageous if you plan to move or refinance within a few years. It's essential to evaluate your long-term goals and financial situation to determine which type of mortgage suits you best.

Myth #4: Refinancing is Always a Money-Saver

Refinancing your mortgage can indeed save you money, but it's not a guaranteed win. It depends on various factors, including your current interest rate, the new interest rate, closing costs, and how long you plan to stay in your home. It's crucial to calculate the potential savings and weigh them against the costs of refinancing before making a decision.

Myth #5: Prequalification Guarantees Loan Approval

Prequalification is an essential step in the mortgage process as it provides an estimate of how much you can borrow. However, it's essential to understand that prequalification does not guarantee loan approval. It's based on the information you provide to the lender and is subject to verification during the underwriting process. To improve your chances of approval, you'll need to provide accurate and complete financial information.

Mortgage Myths Busters: Debunking

Myth #6: You Can't Get a Mortgage with Student Loan Debt

Many aspiring homeowners with student loan debt believe they are ineligible for mortgages. While student loan debt can impact your debt-to-income ratio, which is a crucial factor in mortgage approval, it doesn't automatically disqualify you. Lenders consider various aspects of your financial profile, and with responsible financial management, you can still secure a mortgage.

Myth #7: Adjustable-Rate Mortgages Are Risky

There's a common misconception that adjustable-rate mortgages (ARMs) are inherently risky. While ARMs come with the potential for interest rate adjustments, they can be a viable option for certain borrowers. ARMs often have lower initial interest rates, which can result in lower initial monthly payments. However, it's essential to understand the terms of the ARM, including how and when the interest rate can adjust, to make an informed decision.

Mortgage Myths Busters: Debunking

Myth #8: You Must Pay Off All Your Debts Before Applying

Some believe that you must be entirely debt-free before applying for a mortgage. While managing your debts responsibly is crucial, it's not necessary to eliminate all debt. Lenders evaluate your debt-to-income ratio, which compares your monthly debt payments to your income. Having some manageable debt, such as a car loan or credit card balance, is not an automatic disqualifier for a mortgage.


The world of mortgages is riddled with myths and misconceptions, but armed with the right knowledge, you can make informed decisions about your home loan. Remember, your specific financial situation and goals should guide your mortgage choices, and consulting with a qualified mortgage professional can provide you with personalized advice tailored to your needs. Don't let these myths hold you back from achieving your homeownership dreams.

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