Halloween might come once a year, but the myths surrounding the mortgage process can haunt buyers all year long. From outdated ideas about down payments and credit scores to confusion about rates and self-employment income, these myths keep a lot of good people on the sidelines.

Let’s shine a light on some of the biggest misconceptions so you can make confident, informed decisions — and maybe even laugh at how spooky some of these old myths really are.

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

💀 The Fear: “We’re saving until we have 20% down.”
That belief has been around for decades, and it keeps countless people renting longer than they need to. The idea that 20% is required comes from a time when private mortgage insurance (PMI) was less flexible and loan programs were limited.

🍬 The Truth: Today’s lending world looks very different.
There are dozens of loan programs that allow buyers to put down far less — and still get competitive terms.

• FHA Loans: Just 3.5% down, with more flexible credit requirements.
• Conventional Loans: Some programs allow 3% down, especially for first-time buyers.
• VA and USDA Loans: Zero-down options for eligible military and rural buyers.
• Down Payment Assistance (DPA): Many states and cities offer grants or forgivable loans to help cover part of your down payment or closing costs.

And remember — waiting to save a big down payment can sometimes cost you more. Home values and rents tend to rise faster than most people can save. Owning a home sooner often builds equity faster than waiting for the “perfect” time.

🦇 Myth #2: You Need Perfect Credit

💀 The Fear: “I can’t buy until my credit score is in the 700s.”
It’s easy to assume that lenders only want spotless credit, but that’s far from true. Credit is important, but it’s just one piece of the puzzle.

🍬 The Truth: You can qualify for a mortgage with less-than-perfect credit — even after a few bumps in the road.

• FHA loans may approve borrowers with credit scores in the mid-500s (with certain down payment requirements).
• Conventional loans typically start around the 620 range.
• Non-QM programs (Non-Qualified Mortgages) can work with even lower scores, as long as you have compensating factors like strong income, assets, or a larger down payment.

Credit can be repaired and improved over time — and you don’t have to wait for perfection before taking the first step. Lenders look at your full story, not just one number.

If you’ve had late payments, collections, or even past credit challenges, there are still paths to homeownership. The key is getting the right guidance early so you can build a roadmap that works for your situation.

👻 Myth #3: You Can’t Get a Mortgage if You’re Self-Employed

💀 The Fear: “I don’t get W-2s, so I can’t qualify.”
This one haunts small business owners and freelancers everywhere. Many assume lenders won’t count their income because it doesn’t fit neatly into a paycheck stub.

🍬 The Truth: You absolutely can qualify — you just need a lender who understands how to tell your financial story the right way.

There are loan programs specifically designed for self-employed borrowers:

• Bank Statement Loans: Qualify using 12–24 months of business or personal bank deposits instead of tax returns.
• Profit & Loss (P&L) Loans: Use a CPA-prepared or borrower-prepared P&L statement to show income.
• 1099-Only Programs: For independent contractors who receive 1099s instead of pay stubs.
• Asset-Based Loans: Use your savings, investments, or retirement funds to qualify based on total assets rather than income.

Running your own business doesn’t make you “unlucky” — it just means you need a mortgage solution built for the way you earn.

🕷 Myth #4: High Rates Mean It’s a Bad Time to Buy

💀 The Fear: “I’ll just wait for rates to drop.”
That’s a common reaction — but it’s often a trap. Many buyers sit out the market waiting for the “perfect” rate, only to find home prices and rents have climbed while they waited.

🍬 The Truth: There’s no perfect time — only a smart strategy.
Buying when rates are higher can actually come with hidden advantages:

• Less Competition: Fewer buyers means more negotiating power.
• Seller Concessions: You may be able to get closing cost credits or even a rate buydown.
• Buydown Options: Temporary buydowns (like 2-1 or 3-2-1) lower your payments during the first few years.
• Future Refinancing: “Marry the house, date the rate” — when rates drop, you can refinance to lower your payment later.

It’s also worth noting that when rates eventually fall, more buyers rush back into the market, and bidding wars return. Acting now — with a plan — can put you ahead of that wave.

💀 Bonus Myth: A Past Foreclosure or Bankruptcy Means You’ll Never Qualify

💀 The Fear: “I went through hard times, so lenders won’t touch me.”
This one keeps too many people from even asking the question.

🍬 The Truth: Most loan programs allow borrowers to buy again after a “seasoning period” — typically 2 to 7 years depending on the situation. And some Non-QM programs will consider a borrower even one day after a major credit event, especially with strong compensating factors like a large down payment, solid income, or good reserves.

Life happens. What matters most is how you’ve rebuilt since then. If you’re ready for a fresh start, there are programs made to help you do just that.

🎃 Final Word: Don’t Let Fear Steal Your Opportunity

The mortgage world isn’t full of monsters — just a lot of myths that sound scarier than they really are. With the right guidance, you can move from “I’m not sure I can” to “I’m ready to buy.”

Whether you’re a first-time buyer, self-employed, or simply tired of renting, the best way to find out what’s really possible is to start the conversation.

You might be surprised how close you already are to your new home.