Debunking the Three Most Common Home-buying Myths

For something as common as buying a home, there’s still a surprising amount of confusion around how the process actually works. This is no fault of buyers trying to learn, but reflects an ever-changing industry, and the sheer volume of information that’s out there. It’s no wonder there are some mixed messages.

Advice that worked for someone ten or fifteen years ago may not apply in today’s market, and on top of that, buyers are often getting input from all directions – whether it's from friends and family members, or through online forums and resources. While gathering data points can be a helpful and important part of the process, sometimes things can get a bit muddy, so I’m here to help clear everything up.

The truth is, there are very few one-size-fits-all answers in real estate. What makes sense for one buyer may not make sense for another, and the best decisions are usually the ones based on your goals, your finances, and your timeline.

But there are a few pieces of this process that are facts, and form the foundation to make an educated purchase. This isn’t about telling you what to do or when to do it – it’s about making sure you’re informed to make the right decision for you. So let’s do some learning!

Myth #1: You Need 20% Down to Buy a Home

This is probably the most common home-buying myth out there.

Many people believe that unless they have 20% of a home's purchase price sitting in a savings account, they aren't ready to buy. Here’s the truth: many buyers (especially first-timers) purchase homes with significantly less.

There are a variety of loan programs available that allow qualified buyers to put down far less than 20%. Depending on the loan type and your financial situation, some buyers may qualify for down payments as low as 3% to 5%.

Now let me be clear because I don’t want to bamboozle anyone: a larger down payment is still beneficial for many reasons, it’s just not necessary. Putting more money down can lower your monthly payment, reduce the amount you borrow, and potentially eliminate certain costs like private mortgage insurance.

But needing 20% down? That's simply not true for many buyers. In fact, waiting years to save a full 20% can sometimes delay homeownership longer than necessary, while home prices climb in the interim.

I always suggest that my clients at least take the steps to understand their options, even if the best option is to hold off until they have more saved. A conversation with a lender can help you determine what programs may be available, what your monthly payment could look like, and how much cash you would actually need to bring to closing.

You may discover that your goal is much closer than you thought, or you might be a ways off but have clearer numbers to help paint a picture. Regardless, I want you to know that you have options, there are folks out there to help you figure it out, and you do not need to hold yourself to that 20% number.

Myth #2: You Need to Be Debt-Free Before You Can Buy a Home

Another myth that keeps many buyers stuck is the idea that all debt must be eliminated before homeownership becomes an option. But if that were true, a large percentage of homeowners would never have purchased a home.

The reality is that many people buy homes while carrying some form of debt. Student loans, car payments, credit cards, and personal loans are all common parts of modern financial life. There’s no shame in it, and it certainly isn’t any kind of deal breaker.

What lenders care about isn't whether you have debt, they care about how you manage it.

When evaluating a mortgage application, lenders typically look at factors like your income, credit history, payment history, savings, and debt-to-income ratio. In other words, they want to understand the full picture of your financial health. So someone with student loans who consistently makes payments, maintains strong credit, and has stable income may be in a stronger position than someone with no debt but inconsistent finances.

This comes with the caveat that every situation is different, and some buyers may benefit from paying down debt before purchasing a home, while others may already be in a position to move forward. The key is getting real information about your specific circumstances rather than relying on assumptions, and a lender can help you do this.

Myth #3: The Best Buying Strategy is Waiting for Prices to Drop

This myth tends to show up whenever the housing market feels uncertain. Buyers often tell themselves they'll wait six months, a year, or maybe longer for prices to come down before jumping in. 

Many try to time the market, wait for what-if’s, and hope that things swing in their favor. On the surface, it sounds logical. But just as the market can move in one direction, it can just as easily do so in the other.

The challenge is that no one knows exactly what the market will do next. Not even us real estate professionals! We can analyze trends, look at historical data, and do our best to track where we’re headed, but there is no guarantee. Housing markets are influenced by countless variables, including inventory levels, interest rates, job growth, consumer confidence, and local economic conditions. Because of this, trying to perfectly time the market can be difficult.

And another important point: focusing exclusively on home prices can cause buyers to overlook other important factors. For example, if home prices decline but interest rates increase, your monthly payment may not improve much, or could even become more expensive. Or if prices decline, there could be far more buyers in the pool, creating more competition, driving up prices, even bidding you out of a house you love.

While waiting for the “perfect” market can sometimes feel like the smart move, it can easily keep buyers on the sidelines for longer than necessary. The best thing you can do is to focus on preparing yourself for the market, rather than waiting for the market to fit you. Do you have a stable income? Have you spent some time with a lender? Are you clear on your budget? What about your goals?

Those factors often matter far more than trying to predict what the market might do next. Because the best time isn’t necessarily when the market is perfect, it’s when buying aligns with your goals, finances, and life.

Final Thoughts

In such a large (and often, confusing) industry, it makes sense that there’s a lot of conflicting information. What worked once, may not work now, plus the sheer volume of resources and input can make things feel a little messy.

When buyers assume they need 20% down, believe they must be completely debt-free, or spend years waiting for the perfect market conditions, they often miss opportunities to learn what's actually possible. 

That doesn't mean buying a home is right for everyone right now. But it does mean that if you're curious, it's worth asking questions. Talk to a lender. Have a conversation with a trusted real estate agent (hi!). Learn what your options look like based on your real financial picture and goals.

You might discover you're closer than you think, and even if you're not ready today, you'll leave with a roadmap that helps you move toward your goals with confidence.

Ready to get started? Send me a message or schedule a complimentary consultation to get the ball rolling.