15 Mortgage Myths Debunked in Arizona

❌ MYTH #1

"You need 20% down to buy a house"

✅ THE TRUTH

While 20% down eliminates private mortgage insurance (PMI), most Arizona buyers put down much less. Common down payment options include:

• 3.5% down: FHA loans
• 3% down: Conventional loans for qualified buyers
• 0% down: VA loans for veterans and USDA loans for rural areas
• Arizona-specific programs: Down payment assistance for first-time buyers

Arizona Reality: The median down payment for first-time buyers in Arizona is around 6-7%, not 20%.

❌ MYTH #2

"Down payment must come from your savings"

✅ THE TRUTH

Your down payment can come from multiple sources:

• Gift funds from family members (most common)
• Down payment assistance programs
• Grants for first-time buyers
• 401(k) loans (in some cases)
• Sale proceeds from previous home

Important: Different loan types have different rules about down payment sources. Talk to your Arizona lender about what's acceptable for your specific loan program.

❌ MYTH #3

"You need perfect credit (750+) to qualify"

✅ THE TRUTH

Arizona homebuyers qualify with a wide range of credit scores:

• 580-619: FHA loans available with 3.5% down
• 500-579: FHA loans possible with 10% down
• 620-639: Some conventional loans available
• 640+: Better conventional loan options
• No minimum: VA and USDA (lender overlays may apply)

Arizona Average: The typical approved mortgage applicant in Arizona has a credit score of 680-720, well below "perfect" credit.

❌ MYTH #4

"Checking your credit will hurt your score"

✅ THE TRUTH

There are two types of credit inquiries:

• Soft pulls (checking your own credit, pre-qualification): NO impact on score
• Hard pulls (formal mortgage application): Minimal impact (typically 5-10 points)

Bonus fact: Multiple mortgage inquiries within 45 days count as ONE inquiry for scoring purposes. Shop rates without fear!

❌ MYTH #5

"Past bankruptcy means you can never buy a home"

✅ THE TRUTH

Bankruptcy creates a waiting period, not a permanent ban:

• Chapter 7 bankruptcy: 2 years for FHA, 4 years for conventional
• Chapter 13 bankruptcy: 1 year for FHA (with court permission), 2 years for conventional

Many Arizona buyers have successfully purchased homes after bankruptcy. The key is rebuilding credit and maintaining on-time payments during the waiting period.

❌ MYTH #6

"Self-employed people can't get mortgages"

✅ THE TRUTH

Self-employed Arizonans have multiple mortgage options:

• Traditional loans: 2 years of tax returns showing stable income
• Bank statement programs: Uses 12-24 months of bank deposits instead of tax returns
• Asset-based lending: Qualifies based on assets rather than income
• Non-QM loans: Alternative documentation options

Arizona has a thriving entrepreneurial community. Lenders understand self-employment and have programs designed specifically for business owners.

❌ MYTH #7

"You need two years at the same job to qualify"

✅ THE TRUTH

Lenders look for stable income, not necessarily the same employer:

• Job changes within the same field are generally fine
• Promotions and raises are viewed positively
• New graduates can use offer letters and start dates
• 2-year history can span multiple employers

What matters most is consistent, stable income that's likely to continue, not employer loyalty.

❌ MYTH #8

"You need to make $100K+ to afford a house in Arizona"

✅ THE TRUTH

Arizona home affordability varies widely by location:

Many affordable areas exist throughout Arizona, especially outside major metros. Talk to us about what you can afford.

❌ MYTH #9

"Getting pre-approved means you're guaranteed the loan"

✅ THE TRUTH

Pre-approval is strong, but conditional:

• Pre-approval: Means you qualify based on current finances
• Final approval: Comes after property appraisal and final underwriting
• What can change it: Job loss, new debts, credit changes, property issues

Golden rule: Don't make major financial changes between pre-approval and closing. Avoid new credit, large purchases, or job changes if possible.

❌ MYTH #10

"The mortgage process takes 6+ months"

✅ THE TRUTH

Modern Arizona mortgages close quickly:

• Pre-approval: 1-2 business days
• Average closing timeline: 30-45 days from accepted offer
• Some loans close in 21 days with complete documentation

With experienced Arizona lenders like Todd Uzzell Home Loans, we keep the process moving efficiently.

❌ MYTH #11

"You should go with the first lender you talk to"

✅ THE TRUTH

Shopping around is smart and expected:

• Rates and fees vary significantly between lenders
• Compare at least 3 Arizona lenders
• Look beyond rate - consider service, responsiveness, local expertise
• Multiple inquiries within 45 days = one credit pull

Even a 0.25% rate difference can save thousands over the life of your loan.

❌ MYTH #12

"Rates advertised online are what you'll get"

✅ THE TRUTH

Advertised rates are "best case scenario" rates that assume:

• Excellent credit (740+)
• Low loan-to-value ratio (large down payment)
• No pricing adjustments
• Specific loan programs

Your actual rate depends on credit score, down payment, property type, loan amount, and market conditions. Always get personalized quotes.

Want to know your actual Arizona mortgage rate? Get a personalized quote in minutes.

❌ MYTH #13

"Paying points is always worth it"

✅ THE TRUTH

Points (prepaid interest) only make sense in certain situations:

Calculate break-even point with your Arizona lender before buying points.

❌ MYTH #14

"Closing costs are always 3-5% of the purchase price"

✅ THE TRUTH

Closing costs vary significantly in Arizona based on:

• Loan type (FHA has higher upfront costs)
• Property location (different county fees)
• Lender fees and credits
• Title insurance costs
• Whether seller pays some costs

Arizona closing costs typically range from 2-4% but can be lower with seller concessions or lender credits. Some programs offer closing cost assistance.