Buying your first home is exciting, but it can also be confusing. There’s a lot of advice out there—and not all of it is true. Whether you’re a first time homebuyer or returning to the market, it’s important to separate fact from fiction.
Let’s clear up 10 of the biggest homebuying myths, so you can move forward with confidence—and maybe a little down payment assistance to help along the way.
It depends. If you’re staying in one city or county for at least 5 years, buying may make more sense. That’s because monthly payments build equity over time.
But if you plan to move soon, closing costs, fees, and maintenance could make renting the smarter choice.
Talk to a housing counselor or take a homebuyer education class to find out what’s right for your situation. Many first time buyers qualify for payment assistance programs that make ownership more affordable.
Renters don’t write checks to the tax office, but your landlord does—and that cost is baked into your monthly rent payment. Same goes for insurance. Your rent helps cover the landlord’s policy.
Whether you rent or own, you help pay for taxes and insurance. If you buy, you’ll also likely need mortgage insurance unless your down payment is large enough (usually 20%).
You do not need 20% to buy a home in 2025. In fact, many first time homebuyer down payment programs allow you to get in with as little as 3%. Some payment assistance programs even offer a forgivable loan for your down payment.
FHA loans require just 3.5% down
VA loans and USDA loans require 0% down for eligible program participants
Many states offer down payment assistance programs and closing cost assistance
Focus on what you can afford now, not just the ideal 20%. You might qualify for assistance programs that cover a big part of your payment and closing costs.
Some say renting and investing the difference makes more sense. But most people don’t actually invest that extra money.
Homeownership is still one of the best long-term wealth builders. Your mortgage payments help you build equity, while rising purchase prices increase the value of your investment.
Plus, payment assistance helps make it more affordable upfront.
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Some people buy thinking they’ll make quick cash. That’s risky. The home buying process involves closing, inspections, and maintenance—all of which cost funds.
Homes are best as long-term investments, especially for first generation homebuyers building stability. If you’re looking to get rich quick, real estate may not be your answer.
Homeownership is great—but it isn’t your only path to building wealth. You’ll still need to budget for monthly payments, repairs, and refinance options down the road.
A smart financial plan includes both homeownership and other savings (like a retirement account). But a home gives you a stable place to live—and that’s a powerful asset.
Think saving for a down payment is your only step? Think again. You’ll also face:
Most buyers spend 2% to 5% of the home’s purchase price on closing. For example, if your home costs $300,000, expect to pay $6,000 to $15,000 in payment and closing costs.
Down payment assistance can also help with closing costs. Look for closing cost assistance or down payment assistance grants in your city or county.
You don’t need a 780 credit score to buy a home. While a higher credit score means a lower interest rate, many assistance programs accept lower scores.
You may already be eligible for a mortgage loan even with a few credit dings. Check your credit report, and if needed, contact a nonprofit housing advisor for help improving your score.
Yes, mortgage rates have risen slightly in 2025. But they’re still reasonable compared to historic highs.
And many loan programs offer payment assistance or flexible loan terms to reduce your cost.
Don’t wait forever for the “perfect rate.” Owning a home gives you stability. If rates drop later, you can always refinance your loan.
Missed a payment? Don’t panic. One late mortgage bill won’t make you lose your house.
If you’re struggling, contact your lender or a HUD-approved agency. There are assistance programs for struggling homebuyers to help avoid foreclosure.
Extra Tips for Homebuyers
And don’t forget—repeat homebuyers may still qualify for certain down payment assistance programs. The application process is easier than you might think.
To make your journey smoother:
Buying a new home doesn’t have to be overwhelming. With the right programs, details, and support, you can become a confident, informed homebuyer.
Helpful Resources
