Buying a home is one of the biggest financial decisions many people make, and it can also feel overwhelming with so much advice and information out there. You may have heard you need a huge down payment, a perfect credit score or that it’s better to wait until interest rates drop further. The good news is these common myths don’t tell the whole story. Let’s take a closer look at these myths and what they mean for your home buying journey.
Myth 1: You need 20% down to buy a home
A down payment is the portion of the home price you pay upfront when buying a house. It reduces the amount you borrow and can lower your monthly mortgage payments. How much you put down depends on your budget, the price of the home and the type of mortgage you choose. While a larger down payment can save you money over time, many first-time buyers think they need to save for years to put 20% down. That’s not the case.
- While 20% down can help you avoid private mortgage insurance (PMI), the median down payment for first-time home buyers is about 9%.
- Many loan programs allow as little as 3-5% down.
- The NC Housing Finance Agency offers:
- NC Home Advantage Mortgage™: an affordable mortgage with competitive rates and up to 3% in down payment assistance for first-time and move-up buyers.
- NC 1st Home Advantage Down Payment: additional assistance of $15,000 for eligible first-time buyers or veterans.
Myth 2: You need a perfect credit score
Your credit score is a number that represents your creditworthiness. It shows lenders how reliably you pay your bills and how much debt you carry. While a higher credit score can help you qualify for better interest rates, you do not need a perfect score to buy a home. Lenders also consider other factors such as your income, employment history, the mortgage amount you are requesting and your down payment.
- Most conventional loans require a minimum credit score of around 620.
- The NC Home Advantage Mortgage™ requires a 640-credit score for both first-time and move-up buyers.
- Use the Agency’s list of participating lenders to find a lender you can speak with about mortgage options.
Myth 3: It’s better to wait for the perfect mortgage rate.
A mortgage rate is the interest you pay on a home loan. It affects your monthly payment and how much your home costs over time. Rates can go up or down based on the economy, but you do not have to wait for the “perfect” rate to buy a home.
- As of mid-September 2025, the average 30-year fixed mortgage rate is about 6.35%, down from over 7% earlier this year.
- Experts expect rates may continue to decrease slightly in the near term.
- If you buy now and rates fall later, you could refinance to take advantage of lower rates and lower your monthly payment.
Home ownership may be closer than you think. You do not need a huge down payment, a perfect credit score or to wait for the lowest possible interest rates. With resources like the NC Home Advantage Mortgage™, the NC 1st Home Advantage Down Payment and a participating lender, you have the tools and support to make buying a home achievable today.