First-Time Buyer Myths, Busted

Myth #1: "You need 20% down."

This is the big one, and it's decades out of date. Conventional loans start at 3% down for qualified buyers. FHA starts at 3.5%. VA and USDA loans can be 0% down for eligible buyers. On a $250,000 home, 3.5% is $8,750 — a real number, but a very different number than $50,000.

And in the Capital Area, down payment assistance through CAFA can cover much of that. Twenty percent down does eliminate mortgage insurance, which is why the myth persists — but mortgage insurance is a monthly cost you can weigh, not a moral failing.

Myth #2: "You need perfect credit."

Lenders aren't looking for 800s. FHA financing commonly works in the 580–620+ range, and CAFA's Platinum assistance program starts at 620. If your score needs work, that's a project measured in months, not decades — see our Credit Score Playbook.

Myth #3: "Renting is cheaper."

Renting is cheaper this month, sometimes. But rent compounds against you: it rises most years, and 100% of it builds someone else's equity. A fixed-rate mortgage payment is mostly frozen for 30 years while your income grows around it. Run your own numbers in the Rent vs. Buy guide.

Myth #4: "I should wait for rates to drop."

Maybe! But consider: when rates fall, buyers flood back and prices tend to rise. You can refinance a rate later; you can't refinance a purchase price. The honest answer is that timing the market is a coin flip — buying when you're ready is a plan.

Myth #5: "Pre-qualification and pre-approval are the same thing."

Pre-qualification is an estimate based on what you tell a lender. Pre-approval means your credit, income, and assets have actually been reviewed — and it's what makes sellers take your offer seriously. Always show up with the real one.

Myth #6: "The down payment is the only cash I need."

Closing costs typically run another 2–4% of the price, plus prepaid taxes and insurance. Nobody likes surprises at the closing table, which is exactly why our payment calculator estimates full cash-to-close — and why assistance programs that cover closing costs (like CAFA's) matter so much.