By Lisa Smith & Co.
We hear the same handful of myths from nearly every new buyer we work with, and most of them are the reason people delay a purchase longer than they need to. A lot of the advice buyers pick up online is outdated or was never quite true to begin with. We have walked hundreds of buyers through Marin's market, and clearing up these misconceptions early usually saves months of unnecessary waiting. Here are the myths we correct most often.
Key Takeaways
- A 20 percent down payment has not been required for decades
- Buyers do not need perfect credit to qualify for a mortgage
- Waiting for the perfect interest rate often costs more than it saves
- No home is perfect, and pre-approval is not a guarantee
The 20 Percent Down Payment Myth
This is the myth we correct most often, and it keeps otherwise ready buyers on the sidelines longer than necessary.
What Buyers Get Wrong About Down Payments
- Many loan programs allow down payments as low as three percent
- Some programs allow buyers to put down even less than that
- Down payment assistance programs exist specifically to help first-time buyers
- A larger down payment can help with terms, but it is rarely required outright
We walk every new buyer through their actual financing options before they assume a large down payment is the only path forward.
The Perfect Credit Myth
A close second is the belief that only buyers with excellent credit can qualify for a mortgage.
What Actually Matters to Lenders
- Steady income and a consistent history of paying bills on time
- Some credit issues can still allow for mortgage approval
- Different loan programs carry different credit requirements
- A lower score does not automatically rule out financing
We encourage buyers with credit concerns to talk with a lender early, since the answer is often more flexible than they expect.
The Perfect Interest Rate Myth
Waiting for rates to drop to some ideal number is one of the most common reasons buyers delay a purchase.
Why Waiting Rarely Pays Off
- Rates move up and down based on the broader economy, not a predictable schedule
- Home prices often continue climbing while buyers wait
- Competition from other buyers can increase during a waiting period
- Refinancing later remains an option if rates do eventually drop
We remind buyers that the right rate matters less than being ready to act when the right home appears.
The Perfect Home Myth
Many buyers hold out for a home with no drawbacks at all, and that search can stretch on indefinitely.
What We Tell Buyers Chasing a Perfect Home
- Every home comes with some combination of pros and cons
- Being clear on your true must-haves narrows the search faster
- Cosmetic issues are almost always easier to fix than structural ones
- A good home in the right location often outperforms a flawless one in the wrong spot
We help buyers separate what they actually need from what they simply hoped for, which tends to speed up the entire process.
The Pre-Approval Guarantee Myth
Buyers sometimes treat a pre-approval letter as a done deal, but it is only the first step.
What Pre-Approval Does and Does Not Guarantee
- It shows sellers a buyer is serious and financially prepared
- It does not guarantee final loan approval
- Lenders can still deny a loan if income, credit, or appraisal details change
- Buyers should avoid major financial changes between pre-approval and closing
We tell every buyer to keep their financial picture as steady as possible between pre-approval and closing, since even small changes can complicate things later.
The Myth That You Have to Sell Before You Buy
Buyers who already own a home often assume they need to sell before they can buy, but that is not always the case.
Options Beyond Selling First
- Bridge loans that let buyers purchase before their current home sells
- Contingent offers built around the sale of an existing property
- Home equity lines of credit used toward a down payment
- Timing a sale and purchase to close close together rather than sequentially
We help clients weigh these options early, since the right approach depends heavily on their current equity and comfort with some overlap.
The Myth That Renting Is Always the Safer Choice
Some buyers assume renting avoids risk entirely, but that comparison misses a few important details.
What Gets Left Out of the Rent vs. Buy Comparison
- Rent payments build no equity over time
- Homeownership offers potential tax benefits renting does not
- Rent tends to rise over time, while a fixed-rate mortgage payment does not
- Buying involves upfront costs that renting avoids, which matters for shorter timelines
We walk buyers through their specific numbers rather than relying on a generic rent-versus-buy rule of thumb.
FAQs
Do We Really Need 20 Percent Down to Buy a Home?
No. Many loan programs allow for down payments well below that, and several assistance programs exist specifically to help buyers who cannot put down that much. We review these options with every new buyer before assuming a large down payment is required.
Is It Better to Wait for Lower Interest Rates?
Not usually. Rates are unpredictable, and home prices often continue rising during a waiting period, which can offset any savings from a lower rate later. Refinancing later remains an option if rates do eventually drop.
Does Pre-Approval Guarantee We Will Get the Loan?
No. Pre-approval shows a lender's initial assessment, but final approval still depends on your financial details staying consistent through closing. We remind clients to avoid major purchases or new credit until after closing.
Start Your Home Search With Lisa Smith & Co.
We have walked hundreds of buyers through Marin's market, and clearing up these common myths early usually means a faster, less stressful search. Whether you are a first-time buyer or simply need a clearer picture of your options, we build a plan around your actual circumstances rather than outdated assumptions.
If you are ready to start looking for a home in Marin, we would love to help you separate fact from myth. Reach out to us to learn more about how we guide buyers through the home-buying process.
If you are ready to start looking for a home in Marin, we would love to help you separate fact from myth. Reach out to us to learn more about how we guide buyers through the home-buying process.
