Debunking First-time Homebuying Myths

Do you still think you need 20% down to buy a home? Think again. In fact, forget pretty much everything you think you know about home buying. Modern Lending, a leading home loan and mortgage brokerage, is about to expose common misconceptions about buying a home in 2025. These myths often stand in the way of regular, eligible people from buying their first home. In reality, most of what they believe is not even true. 

Myth #1: You Need a 20% Down Payment

Gone are the days of a 20% down payment on a new home. Assistance programs like FHA loans and VA loans give first-time home buyers down payment loans to help reduce high down payments. FHA loans only require a 3.5% down payment, and borrowers only need to have a minimum credit score of 580 or higher. Buyers can qualify for a loan despite having a higher debt-to-income ratio by having a steady employment history, and they can also receive money from the FHA to cover closing costs.

The VA loan is a $0 down mortgage option available to military Veterans, Service Members, and select military spouses. VA loans are issued by private lenders such as mortgage companies or banks and are guaranteed by the U.S. Department of Veterans Affairs (VA).

Myth #2: Your Credit Score Has to Be Perfect

While credit scores seem to be treated as the be-all and end-all measure of renter and borrower reliability, we, among others, understand that they don't reflect an individual's true financial history. Characteristically, FHA loans are available to applicants with low credit scores, even applicants who have declared bankruptcy. To qualify, borrowers must have a minimum credit score of 580. While the Department of Veterans Affairs has no set score required for a VA loan, independent lenders tend to require a score of at least 620. However, different lenders have different credit score requirements, so it is important to check with your local mortgage lender for their requirements.

Myth #3: Mortgages Are a One-Size-Fits-All Product

Wrong! Mortgages are actually quite flexible. In fact, there is even a specific loan type to allow veterans to reduce their monthly mortgage payments, convert adjustable rate to fixed-rate mortgages and change loan terms. You can also refinance your mortgage to achieve a lower interest rate, a longer term or a different type of loan! It is important to choose a mortgage lender that has your best interest in mind and will help you through the loan and payment process. Some lenders allow you to make lump sum payments to reduce your principle, some allow you to negotiate your fixed-rate mortgage. Modern Loan's tailored approach puts our clients first, so that each client is comfortable in their home-buying process.

Myth #4: The Process Takes Forever

With Brian Decker and his team of mortgage lenders, your home loan can be fully funded 21 days from now. We understand that waiting around for approval will only cost you more money. As front-runners in the mortgage industry, our speed and support makes for a speedy loan process.

Are You Ready to Unlock Home-Ownership with Modern Lending?

Our simplicity and transparency make it easier than ever for our clients to buy their first home. We're busting every myth there is about first-time home buying so that YOU know what resources are available. And that's not all, we're guiding you through the process so that there are no barriers to home-onwership. Contact us today to get pre-qualified for a loan or to speak to one of our talented loan experts.