There are plenty of mortgage-related myths going around in the market. While most seasoned borrowers will probably be able to tell the difference between fact and fiction, first time home owners may not be as lucky.

This article aims to help first time home owners debunk the most common mortgage-related myths. In the process, we’ll also discuss the actual facts underlying each myth.

Myth No. 1: You need to know which house you’re buying before approaching a mortgage lender.

This is completely untrue. While it may be understandable to think that way, it is actually wiser to approach a mortgage lender before you start shopping for your new home.

Consider this very common and very unfortunate scenario. After deciding to buy a home, you spend several months scouring the market, viewing listings, going to open houses, and dealing with real estate brokers. Finally, your search pays off. You finally find your dream house. It is perfect in every way. It answers your every need and fits with all your future plans. At this point, you start looking for a mortgage lender. Fortunately, there are tons of them on the market. Unfortunately, none of them are willing to give you a loan for your dream house. Simply put: it is beyond your budget and it makes no fiscal sense for the lenders to loan you a significant amount of money which you can never repay.

Imagine how you’d feel in that scenario. Clearly, you would feel depressed, frustrated, and discouraged to say the least. This is exactly why you should look for a mortgage lender first. Doing so will allow you to know your budget and adjust your expectations accordingly. Moreover, you’d be able to significantly streamline your search by avoiding all listings that are above your price range. This will not only help you save a lot of time and effort during your search, but will also allow you to save face with your real estate broker and sellers.

Myth No. 2: You need a perfect credit score to get your mortgage application approved.

Well, this myth is at least partially true. However, your credit score does not need to be perfect, it just needs to be high enough to justify the amount of your mortgage. For example, FHA loans typically require a credit score of 500, while conventional loans need at least 650. A lot of factors determine your credit score. Payment history, revolving credit, available credit, and debt-to-income ratio are just some of the factors which determine your trustworthiness as a creditor. However, since the aforementioned factors are pretty hit or miss, a lot of mortgage lenders tend to consider outside factors as well. These factors include the steadiness of the applicant’s income and his general reputation in the local community, if relevant.

Myth No. 3: You need to make a large down payment.

Although its true that larger down payments will result in lower monthly amortizations, you don’t need to make a large down payment. The fear of making a large down payment is understandable. Not everyone can afford to take out a huge part (if not the entirety of) their life savings to buy a house. There will always be bills to pay, so it’s also unwise to blow all your money without leaving an emergency fund for unexpected expenses.

Some buyers don’t even need to put up the usual 20% down payment. To avoid the large expense, many of these buyers took advantage of government-sponsored financing programswhich significantly lower the amount of down payment required. You should definitely do a little more research on these programs if you want to learn more about low down payments. Nevertheless, do keep in mind that the lower down payment is, the larger the monthly amortization will be.

Myth No. 4: A 30-year fixed-rate mortgage is your best choice.

This type of mortgage may be the most popular, but it is certainly not the best under every circumstance. Spreading the payment over 30 years will make the monthly amortization more affordable. However, it will be more expensive after you consider the interest you need to pay off. Moreover, you might not even own the home for that long. A lot of buyers purchase their first home only to resell it several years later.

Myth No. 5: You need to stick with the lender that approved you.

This myth can be chalked up to basic human nature. After all, if someone shows trust in us, it is only natural that we reciprocate their trust. If you’re doing this with your lender, you are certainly playing nice but you’re not playing smart. The best thing to do is to keep searching and examine all your options before objectively deciding which lender is offering the best terms.