1. You Need a 20% Down Payment 

Perhaps one of the most common of the 7 home buying myths is that you must have 20% down to qualify for a home loan. Luckily, you don’t need that much money down, and you can get a house for much less down, with some loans offering a 0% down payment. Many homeowners put less than 20% down on their homes, and with many loans, that’s completely normal. For example, the FHA loan allows you to put down as little as 3.5%, while the VA loan will enable vets to put nothing down on their homes. You can also choose government home loans, which can help people in rural areas purchase a home.

2. You Can’t Buy a Home if You Have Debt

Most Americans have some form of debt, including credit card debt and student loans. However, just because you have some amount of debt doesn’t mean you can’t own a home or qualify for a great mortgage loan. However, having debt can make getting a loan more difficult. Lenders look at your debt-to-income (DTI) ratio to ensure you can pay back the loan. Luckily, most lenders expect you to have some monthly debts, but it’s typically best to try to boost your credit score before you apply for a loan.

3. Only Banks Offer Home Loans

Many people choose to get their mortgage loan through their bank or credit union. However, banks are not the only option for getting a loan. Independent mortgage lenders may offer better terms and lower prices than your local bank. If you’re not sure what options are available in your area, try doing some research and ask around to find out where others got their loans.

4. 30-Year Loans Are Best

Many first-time homebuyers choose a conventional 30-year loan because it provides lower monthly payments, but you might also want to select a 15 or 20-year loan, all of which have their own benefits. A shorter loan term offers you a way to spend less money on interest and less over the life of your loan. Of course, you need to choose a plan that fits your budget. Shorter loans mean higher monthly payments, so it’s important to understand just how much you can afford.

5. Renting is Cheaper

While homeownership comes with higher upfront costs than renting, renting is actually more expensive in the long run. Rents rise over time, but fixed-rate mortgages don’t. Additionally, over time your house appreciates in value, which means you’ll be able to sell it for more than you bought it, allowing you to make money on your investment.

With an apartment, you can’t recoup any of the money you spend on rent, making renting more costly than buying in the long run. Of course, rent might be cheaper than a monthly mortgage payment, so do your research. If you don’t have enough money for a down payment, renting might be your best option until you can put more money down and reduce your monthly mortgage payment.

6. You Need Excellent Credit

One of the most important factors lenders consider when deciding whether or not to offer you a loan is your credit score. Luckily, you don’t need excellent credit to qualify for a home loan; you just shouldn’t have poor credit. That being said, the better your credit score, the better terms you’ll get on your loan, and the lower your mortgage rate will be. Even if you don’t have great credit, you may still qualify for a loan. Additionally, there are options for people with less-than-ideal credit scores designed to help anyone purchase their first home. Of course, each lender has its own criteria, so do your research before you apply for a loan.

7. The Buyer Always Pays Closing Costs

Most people assume that the buyer always pay the closing costs, but closing costs can be negotiated. Closing costs are an additional fee on top of the price of the home, which includes appraisal, lender fees, and legal fees. In most cases, the buyer will pay the closing costs, with the seller paying some of the fees. However, a buyer may also pay the entire cost themself. That being said, closing costs can be negotiated during the negotiation process. For example, you may be able to get the seller to pay a portion of the closing costs.