The Mortgage Corner with Green State Credit Union: Separating Fact from Fiction - Common Mortgage Misconceptions

The average person will own three homes in their lifetime. Whether you’re preparing to purchase your first, second, third, or tenth home, the process can be both exciting and daunting. There’s an endless amount of information out there and plenty of well-meaning people willing to offer a perspective, but it’s easy to encounter misconceptions. Our goal is to provide you with accurate information so you can navigate your home purchase journey with confidence. 

Myth: Higher down payments mean better interest rates
While a substantial down payment can have a positive impact on your interest rate, it is just one of several factors at play. Your credit score, mortgage loan type, and current market conditions are some of the other factors considered when determining a rate.

Myth: Having a low credit score is a dealbreaker
Credit scores are important, but they aren’t everything. There are minimum credit score thresholds required to purchase a home, however there are some loan programs that offer more flexibility, including buyers with lower credit scores.

Myth: I can’t buy a home if I have student loans
Prospective home buyers are not required to be 100% debt-free to purchase a home. When reviewing your application, we’ll look at your debt-to-income ratio, which will include your student loans and any other outstanding debts you may have.

Myth: I need a 20% down payment
You don’t need a 20% down payment to buy a home. In fact, many buyers secure their dream homes with less. A 20% down payment can lower your monthly payment and help you avoid private mortgage insurance, but GreenState has programs available with lower down payment options and will work with you to find the best payment solution to fit your financial situation.

Myth: Down payment assistance is only for low-income buyers
Down payment and closing cost assistance comes in various forms for eligible borrowers with different needs. Local and state governments, charities, and other organizations have various down payment assistance programs, and we’d be happy to help you evaluate them.  

Understanding the realities – not myths – of the home buying process will empower you to make informed decisions. Remember, there may be assistance programs and resources to support you no matter what stage of the process you’re in. 

Feel free to contact on our mortgage lenders with any questions www.greenstate.org/mortgage

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