Mortgage Myth Checks

Mortgage claims that sound simple — but usually need context.

These checks separate common internet shorthand from the actual rule. Agency and government guidance comes first; lender and investor overlays can still be more restrictive.

Common claims

Start with the myths buyers hear most.

“My lender won't do it” and “the program doesn't allow it” are not always the same statement.

MYTH CHECK
“You need 20% down to buy a home.”

No. Multiple mortgage programs allow eligible buyers to purchase with less than 20% down. The tradeoffs can include mortgage insurance, funding/guarantee fees, eligibility requirements and different pricing.

Compare programs →

MYTH CHECK
“Conventional loans require a 620 credit score.”

Not as a universal agency rule. Current automated-underwriting frameworks do not create one blanket 620 minimum for every conventional loan. Score still matters for AUS findings, pricing, mortgage insurance and lender/investor overlays.

Conventional credit score guide →

MYTH CHECK
“FHA is only for first-time buyers.”

No. FHA does not generally require you to be a first-time buyer. FHA has its own occupancy, eligibility and underwriting rules.

FHA guide →

MYTH CHECK
“Preapproved means the loan is guaranteed.”

No. Property review, documentation, underwriting conditions and changes to credit, income, assets, employment or the transaction can still affect approval.

Mortgage process →

MYTH CHECK
“The appraisal is the same as a home inspection.”

No. The lender's appraisal supports valuation and applicable property requirements. A buyer's home inspection is a different review intended to help the buyer understand condition and potential issues.

FHA appraisal example →

MYTH CHECK
“Every lender follows exactly the same guidelines.”

No. Agency or government program rules create a framework, but lenders and investors can impose overlays or choose not to offer an otherwise permitted scenario.

Fannie vs. Freddie →

MYTH CHECK
“If one lender says no, the loan program prohibits it.”

Not necessarily. The issue may be a lender overlay, investor appetite, property restriction, documentation issue or a true program rule. The reason for the “no” matters.

Research the scenario →

MYTH CHECK
“Down-payment assistance is free money for everyone.”

No. Assistance can be a grant, forgivable second, deferred-payment second, repayable second or another structure. Income, geography, occupancy, education, loan program and repayment rules vary.

DPA by state →

MYTH CHECK
“A 75% rental-income factor is always the rule.”

No. Rental-income treatment depends on the program, property, documentation and borrower history. A 75% gross-rent calculation appears in some agency scenarios, but it is not a universal mortgage rule.

Rental income guide →

MYTH CHECK
“Non-QM means subprime or no-doc.”

No. Non-QM describes loans outside the Qualified Mortgage framework; it does not automatically mean subprime, and alternative documentation is not the same as no documentation.

Non-QM vs. subprime →

How MortgageDadOf3 checks a claim

First identify the exact program and scenario. Then check the controlling agency or government source. After that, separate the underlying rule from lender/investor overlays and from transaction-specific facts. Mortgage rules change, so dated claims should be reverified before someone relies on them.