12 Common Home Buying Myths Every Denver Buyer Should Know

Buying a home is exciting, but misinformation can make the process confusing. Myths about down payments, credit, and timing often cause buyers to delay or miss great opportunities.

At Highlands Property Group, I help clients approach homeownership like an investment. Whether you are buying your first home or adding to your portfolio, understanding the facts behind these myths helps you make confident, informed decisions.

1. You Need a 20% Down Payment to Buy a Home

This is one of the most common misconceptions. Many buyers believe they need 20% down, but today’s lending environment offers far more flexibility.

Loan programs such as FHA, VA, and USDA loans allow down payments as low as 0–3.5%. Even many conventional loans accept 5% down.

📊 According to Freddie Mac’s 2024 report, the average first-time homebuyer puts down only 6% nationwide.

Waiting to save 20% could cost you thousands as home prices and interest rates rise.

2. Renting Is Always Cheaper Than Buying

Renting can appear cheaper in the short term, but buying creates long-term financial stability through equity and appreciation.

Denver rents have risen an average of 5% annually over the past five years, while homeownership allows you to lock in a fixed mortgage payment and build wealth over time.

📈 A study by ATTOM Data Solutions found that owning is more affordable than renting in 47% of U.S. markets when accounting for equity gains.

For many buyers, the real question is not “Can I afford to buy?” but “Can I afford to keep renting?”

3. You Need Perfect Credit to Qualify for a Mortgage

While a strong credit score helps you secure better terms, perfect credit is not required. FHA loans can be approved with scores as low as 580, and many conventional lenders will approve buyers in the mid-600s with compensating factors such as stable income or high savings.

Your lender will also evaluate your debt-to-income ratio, employment history, and overall financial profile.

Pro Tip: If you are preparing to buy within the next 12 months, avoid new credit inquiries and pay down revolving debt to improve your score.

4. You Should Start Home Shopping Before Getting Preapproved

This is a costly mistake. Getting preapproved first tells you exactly what you can afford and strengthens your position with sellers.

In Denver’s competitive market, listings often receive multiple offers. A preapproval letter shows you are serious and financially ready, which can make your offer stand out.

📈 In 2025, preapproved buyers in Colorado had a 54% higher offer acceptance rate compared to buyers without preapproval (Zillow Research).

5. Preapproval Guarantees Final Loan Approval

A preapproval is an estimate based on your financial profile at that moment. If your income changes, you take on new debt, or your credit score drops before closing, your approval could be affected.

Avoid making large purchases or switching jobs until your home is fully closed. Think of preapproval as your financial foundation, not the final stamp.

6. A 30-Year Fixed Mortgage Is Always Best

While the 30-year fixed mortgage is popular for its stability, it is not the only option. A 15-year loan can save you tens of thousands in interest, and adjustable-rate mortgages (ARMs) can be useful if you plan to sell or refinance within five to seven years.

Work with a trusted lender who can model multiple loan scenarios so you can align your financing with your long-term strategy.

7. The Down Payment Is the Only Upfront Cost

Down payment is only one piece of the puzzle. Buyers should also budget for closing costs, typically 2–6% of the purchase price, which cover appraisal fees, title insurance, and escrow charges.

You may also need funds for inspections, earnest money, and home insurance. Being financially prepared prevents surprises during closing.

8. Mortgage Payments Are the Only Ongoing Expense

Owning a home involves more than the mortgage. You will also pay property taxes, insurance, utilities, and maintenance.

Industry data shows that annual maintenance averages 1–2% of your home’s value. For a $750,000 home in Denver, that could be $7,500 to $15,000 per year.

Budgeting for these costs ensures financial comfort and protects your investment.

9. You Should Always Buy the Biggest Home You Can Afford

Bigger is not always better. Stretching your budget too far can lead to financial stress, especially when property taxes, utilities, and upkeep are considered.

Instead, buy strategically. A smaller, well-located home in a desirable neighborhood often appreciates faster than a larger one in a less stable area.

📊 In Denver, homes under 2,500 square feet have appreciated 8% faster than those above 4,000 square feet since 2020 (CoreLogic, 2025).

10. Student Loans Will Prevent You from Getting a Mortgage

Student loans do not automatically disqualify you. Lenders focus on your debt-to-income ratio (DTI), not just the existence of student loans.

If your payments are manageable and you maintain consistent credit and income, you can still qualify. In fact, over 38% of recent homebuyers in Colorado carried student debt at the time of purchase.

11. You Should Wait for the “Perfect” Market Conditions

Timing the market rarely works. Waiting for the ideal interest rate or price drop often means missing opportunities.

Real estate wealth grows through time in the market, not timing the market.

As long as you are financially ready and plan to hold the property long enough to benefit from appreciation, it is better to buy strategically now rather than wait indefinitely.

12. Home Inspections Are Optional

While not always required by lenders, inspections are one of the smartest investments you can make.

They identify hidden issues and can give you leverage in negotiations. Skipping an inspection to “save money” can result in expensive surprises later.

📈 HomeLight’s 2024 Seller Insights Report found that buyers who conducted inspections saved an average of $11,000 in post-closing repairs.

Why Busting These Myths Matters

Buying a home is both an emotional and financial milestone. Separating fact from fiction helps you make smarter decisions, whether you are purchasing a personal residence or an investment property.

At Highlands Property Group, I combine investment insight with local expertise to guide clients through each step of the process. From financing strategies to identifying undervalued opportunities, my goal is to help you build wealth through real estate.

📩 Ready to make your move?Contact Highlands Property Group today to schedule a strategy session or explore available homes in your target neighborhoods.