15 Home Buying Myths and Misconceptions, Corrected

The most costly home buying myths are about money: that you need 20 percent down, perfect credit, or a falling rate before you buy. In reality, many loans allow 3 to 3.5 percent down, and the right time to buy depends on your budget and plans, not on headlines.

Old advice sticks around. Some of it was never true, and some of it changed with new rules in 2024 and 2025. Below are 15 common myths, each with what is actually true in October 2026.

Figures here are national or California rules. Your lender will tell you what applies to you.

Money myths

1. “You need 20 percent down.”

Not for most loans. FHA loans allow down payments as low as 3.5 percent. Fannie Mae’s 97 percent loan-to-value options allow 3 percent down for eligible buyers. VA and USDA loans can require no down payment for those who qualify. Putting down less than 20 percent on a conventional loan usually means paying private mortgage insurance, which protects the lender, not you.

2. “You need perfect credit.”

FHA loans accept lower credit scores than most conventional loans. A higher score does get better pricing, so it is worth checking your credit report and fixing errors before you apply.

3. “Renting is always cheaper.”

Sometimes it is, month to month. Owning adds property tax, insurance, maintenance and sometimes HOA dues. But each payment also reduces your loan balance, and in California, Proposition 13 limits how fast the assessed value rises. The answer depends on how long you will stay. Our renting vs. buying guide walks through the math.

4. “Wait until rates drop.”

No one can time rates. As of October 22, 2026, Freddie Mac’s weekly survey put the average 30-year fixed rate at 7.32 percent. If rates fall later, many owners refinance, but that has costs and is never guaranteed. Buy when the payment works for your budget today.

5. “Down payment help is only for low incomes.”

Programs vary. CalHFA’s MyHome Assistance Program offers a deferred junior loan for down payment or closing costs, up to 3.5 percent of the price on CalHFA FHA loans or 3 percent on conventional loans. Income limits and other rules apply. Some cities and counties run their own programs too.

6. “Jumbo loans are only for mansions.”

The 2026 baseline conforming loan limit set by FHFA is $832,750 for a one-unit home, and up to $1,249,125 in high-cost areas. Several Bay Area counties sit at or near that ceiling, so many ordinary homes still fit a conforming loan. Check your county’s exact limit. See our page on mortgages, loan limits and affordability in Sonoma County.

Process myths

7. “Start by searching listings.”

Start with a lender. A pre-approval tells you your real price range and makes your offer stronger. Then search. Our step-by-step buying process lays out the order.

8. “Pre-qualified and pre-approved mean the same thing.”

A pre-qualification is usually an estimate based on what you tell the lender. A pre-approval involves the lender checking credit and documents. Sellers take pre-approvals more seriously.

9. “All lenders are the same.”

Rates and fees differ. Lenders must give you a Loan Estimate within three business days of your application, on a standard form, so you can compare offers line by line.

10. “A buyer’s agent is free.”

Since 2024, buyers sign a written agreement with their agent that states the agent’s compensation. In California, these agreements are limited to three months and must be signed no later than your offer. Commissions are negotiable. Sometimes the seller pays some or all of the buyer agent’s fee, but that is negotiated, not automatic.

11. “You do not need an agent if you find the house yourself.”

You can buy without one, but you take on pricing, negotiation, disclosure review and deadlines yourself. California purchase contracts have many dates and contingencies that matter.

Property myths

12. “A new or remodeled home does not need an inspection.”

It does. New homes can have construction defects, and remodels can hide shortcuts or unpermitted work. Read why a home inspection matters.

13. “The seller’s disclosures tell you everything.”

Disclosures cover what the seller knows. They do not replace your own inspections, permit research and review of fire zone, flood and natural hazard reports.

14. “The listing price is the price.”

Some homes sell above asking, some below. The right offer depends on recent comparable sales and how long the home has been on the market. Ask your agent to show you the data.

15. “You should buy the most house you are approved for.”

Approval is a ceiling, not a target. Leave room for repairs, insurance, savings and life changes. Many buyers are happier a step below their maximum.

Myth vs. fact at a glance

Questions people ask

What is the minimum down payment in California?

It depends on the loan, not the state. FHA allows 3.5 percent, some conventional programs allow 3 percent, and VA and USDA can allow zero for eligible buyers.

Do first-time buyers get special programs?

Some programs, such as Fannie Mae’s standard 97 percent option, require at least one first-time buyer. CalHFA offers several assistance programs. Ask a lender which ones you qualify for.

Is it a bad time to buy?

There is no universal answer. If you plan to stay several years, have stable income and the payment fits, timing matters less than buying the right home at a fair price.

Get real numbers

If you are thinking about buying, our first-time homebuyer’s guide is a good next read. When you are ready, start your home search with us.

Sources & notes

• CFPB: FHA loans
• CFPB: VA, USDA and special loan programs
• CFPB: What is private mortgage insurance?
• CFPB: What is a Loan Estimate?
• Fannie Mae: 97% loan-to-value options
• FHFA: Conforming loan limit values for 2026
• Freddie Mac: Primary Mortgage Market Survey (week of October 22, 2026)
• CalHFA: Homebuyer programs
• California DRE: AB 2992 buyer-broker agreement regulations
• National Association of Realtors: Written buyer agreements 101

Last reviewed October 2026 by Matthew Martinez.