Five Mortgage Myths in Today's Market
These five myths are costing Colorado homebuyers time, money, and missed opportunities. Jerry Volk breaks down the truth behind each one — so you can make smarter decisions.
What you'll learn in this guide
From down payment misconceptions to credit score confusion, these five myths are some of the most common — and most costly — mistakes Colorado buyers make. This guide walks through each myth, explains why it persists, and gives you the real facts so you can move forward with confidence.
You Need 20% Down to Buy a Home
This is one of the most persistent myths in real estate — and it stops buyers cold. The truth? VA loans require zero down payment for eligible veterans and active-duty service members. FHA loans allow as little as 3.5% down. Conventional loans can go as low as 3% down for qualified buyers. Colorado also has several down payment assistance programs that can cover part or all of your down payment. The 20% figure comes from a time when it was required to avoid PMI (private mortgage insurance) on conventional loans — but even that isn't always the right calculation today. Waiting to save 20% while home prices and rates move can cost you far more than PMI ever would.
You likely need far less than 20% down — and there may be programs to help cover what you do need.
Your Credit Score Has to Be Perfect
Many buyers assume they need a 750+ credit score to qualify for a mortgage. That's simply not true. FHA loans are available with scores as low as 580 (and sometimes lower with compensating factors). VA loans have no official minimum score — lenders set their own overlays, but many approve scores in the 580–620 range. Conventional loans typically require a 620 minimum, though better rates come with higher scores. The key is knowing which loan type fits your profile — and working with a broker who has access to multiple lenders, not just one bank's guidelines. Even if your score needs work, there are often quick, targeted steps that can move it meaningfully in 30–90 days.
You don't need perfect credit — you need the right loan type and a lender who knows how to work with your profile.
You Should Find the Home Before Getting Pre-Approved
It feels natural to browse homes first and worry about financing later. But in today's Colorado market, that approach can cost you the home you want. Sellers — especially in competitive markets — won't take an offer seriously without a pre-approval letter. Without one, you also don't know your real price range, which means you might fall in love with a home you can't afford, or miss out on homes you actually qualify for. Pre-approval also surfaces any credit or income issues early, when there's still time to fix them. And it gives you real negotiating power — a pre-approved buyer is a credible buyer.
Get pre-approved before you shop. It protects your time, your emotions, and your negotiating position.
Your Bank Will Give You the Best Rate Because They Know You
Loyalty to your bank feels like it should count for something — but mortgage lending doesn't work that way. Banks offer their own products at their own rates. They have no obligation to shop the market for you, and they often can't. A mortgage broker, by contrast, works with dozens of wholesale lenders and can compare rates and terms across all of them on your behalf. Wholesale rates are typically lower than retail bank rates because there's no branch overhead built in. Your bank may also have stricter overlays — internal guidelines that are tighter than the loan program actually requires — which can disqualify you even when you'd be approved elsewhere.
Your bank knows your checking account — not the mortgage market. A broker shops the whole market for you.
You Should Wait for Rates to Drop Before Buying
Waiting for the 'perfect' rate sounds smart — but it's one of the costliest strategies in real estate. No one can predict when rates will fall, how far they'll drop, or whether home prices will be higher by then. Meanwhile, every month you wait is a month of rent paid instead of equity built. The real strategy is to buy when you're financially ready and the home makes sense — then refinance if rates drop significantly later. This is sometimes called 'marry the home, date the rate.' The break-even on a refinance is typically 18–24 months, so if rates drop by 1% or more within a few years of your purchase, refinancing almost always makes sense.
Buy when you're ready. Refinance when rates drop. Waiting for the perfect rate often costs more than it saves.
Get the full guide as a PDF
Download all five myths with the full breakdown — formatted for easy reading and sharing.
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