Some of the Common Myths I hear Home buyers believe include the following:

There is a requirement of 20% down payment- while the traditional down payment gets you the most favorable payment options. There is no requirement for a down payment this high. You can put down as little as 3% in order to qualify, many will pay mortgage insurance on a temporary basis until you build equity in your home. Veterans do not require any down payment at all and can override mortgage insurance altogether.

Need to have perfect credit of 740- this is a common misconception as the higher the credit score, the better your payments will be. However, to qualify to buy a house or refinance you can still do so with credit scores as low as 580. Lenders will look at your overall profile from ability to repay,  past repayment history, income in order to offset credit ratings.

Need to be at the same employer for 2 years- While many mainstream lenders and banking institutions require a 2 year history of employment, it does not have to be with the same employer. The main thing to consider if you are a W2 employee is to be in the same line of work for the duration. Anyone who is retired, self-employed or has a sophisticated source of income there are still many products available.

I need to close all my credit cards- this is a very common misconception that having debt is bad. While lenders like to see your overall outgoing expenses every month sit at or below 43%. This is not always the case if you have higher credit or a larger down payment. It is a rule of thumb to consider, however can vary greatly on a case by case basis. Lenders like to see your repayment history, that means if you have two major trade lines for the last two years. They can see how often you fall late on payments over 30 days, if there are any delinquencies on federal debt. If you pay off and close your credit cards, this actually works against you as there would no longer be an ongoing record of your repayment pattern. Generally it is better to keep revolving debts open as long as you carry no more than 30% of your credit line. Typically anything lower and lose to 10-15% is better overall.