The internet is full of real estate advice. Unfortunately, a lot of it is wrong — and believing the wrong thing at the wrong time can cost you tens of thousands of dollars or cause you to miss the right home entirely.
I hear the same myths from buyers every week. Some are outdated rules that made sense 20 years ago. Others are half-truths that sound logical but don't hold up when you look at the actual numbers. Here are the seven biggest ones — and what's actually true in New Jersey in 2026.
Myth #1: "You Need 20% Down to Buy a Home"
This is the single biggest myth keeping would-be buyers on the sidelines. The 20% down rule hasn't been a requirement in decades.
Here's what's actually available:
| Loan Type | Minimum Down Payment |
|---|---|
| Conventional | 3–5% |
| FHA | 3.5% |
| VA (veterans) | 0% |
| USDA (rural areas) | 0% |
| NJHMFA First-Time Buyer | 3–3.5% + up to $15K DPA |
On a $450,000 home in NJ, 20% down is $90,000. A 5% conventional loan requires $22,500. That's a $67,500 difference in cash you'd need upfront.
Yes, putting less than 20% down means you'll pay private mortgage insurance (PMI) — typically $50–$150/month on a $400K home. That's far less than most people assume, and it drops off automatically once you hit 20% equity. Waiting years to save $90,000 while home prices climb 3–5% annually almost never works out in your favor.
Myth #2: "You Need Perfect Credit to Get a Mortgage"
You don't need a 780 credit score to buy a home. You don't even need a 700.
- FHA loans: minimum credit score of 580 (with 3.5% down)
- Conventional loans: minimum 620
- VA loans: no official minimum, though most lenders want 620+
A higher score gets you a better interest rate — there's no question about that. The difference between a 680 and a 760 score might be 0.25–0.50% on your rate, which matters over 30 years. But a less-than-perfect score doesn't disqualify you.
What to do: Get pre-approved before you start shopping. A lender will pull your credit, review your income, and tell you exactly what you qualify for. If your score needs work, even 3–6 months of focused effort (paying down balances, correcting errors) can make a meaningful difference.
Myth #3: "You Should Wait for Rates to Drop"
This one sounds logical but ignores how markets actually work. When mortgage rates drop, more buyers enter the market. More buyers means more competition, more bidding wars, and higher prices.
We saw this play out in real time. The 30-year mortgage rate dropped from 7.79% in October 2023 to 5.98% today — and buyer demand has risen accordingly. Homes in Bergen and Essex counties are selling above asking price again.
The math that matters: a 0.5% rate drop on a $450K mortgage saves you about $135/month. But if increased competition pushes the price up $15,000–$20,000, you've lost more than you saved.
The better approach: "Marry the house, date the rate." Buy when you find the right home at a price that works, then refinance if rates drop further. You can always refinance your rate — you can't go back in time and buy at last year's price.
For a deeper look at what actually drives mortgage rates, read Why Mortgage Rates Don't Follow the Fed.
Myth #4: "The Listing Price Is What You'll Pay"
The listing price is the seller's opening position. What you actually pay depends on the market.
In NJ right now, the sale-to-list ratio varies dramatically by county:
| County | Avg. Sale-to-List | What It Means |
|---|---|---|
| Essex | 103% | Selling 3% above asking |
| Bergen | 102% | Selling 2% above asking |
| Hudson | 100% | Selling at asking |
| Middlesex | 100% | Selling at asking |
| Passaic | 97% | Room to negotiate below |
| Ocean | 98% | Some negotiating room |
In a hot market, you might need to offer $10K–$20K over asking. In a cooler market, you might get $15K off. Your agent should be showing you this data for every listing you consider — it's how you craft an offer that wins without overpaying.
Myth #5: "You Don't Need a Buyer's Agent"
Some buyers think they'll save money by going directly to the listing agent or handling it themselves. In practice, this usually costs more.
A buyer's agent:
- Negotiates price, repairs, and credits on your behalf — often saving thousands
- Identifies problems you'd miss (overpriced comparables, pending assessments, zoning issues)
- Guides you through NJ-specific requirements — attorney review, municipal inspections (CO/CCO), flood zone disclosures, oil tank sweeps
New Jersey's home buying process is more complex than most states. The attorney review period, municipal certificate of occupancy requirements, and inspection negotiations all have NJ-specific rules. Going in without representation is like representing yourself in court — possible, but rarely a good idea.
Myth #6: "Skip the Home Inspection to Win the Bid"
During the 2021–2022 frenzy, some buyers waived inspections to make their offers more competitive. That era is over, and the buyers who waived inspections are the ones calling contractors now.
A home inspection costs $400–$600. Here's what it can catch:
- Foundation issues: $10,000–$50,000+ to repair
- Buried oil tanks: $5,000–$30,000 for removal and remediation
- Roof replacement: $8,000–$20,000
- Electrical or plumbing problems: $3,000–$15,000
- Mold or water intrusion: $2,000–$10,000+
In NJ, you have an attorney review period (3 business days after contract signing) where either party can modify or cancel the contract. This is your built-in safety net. Use it.
Better strategy: Don't waive the inspection — but be strategic about what you ask for. Requesting every minor repair signals to the seller that you'll be difficult to close with. Focus on structural, safety, and high-cost items.
Myth #7: "Renting Is Always Throwing Money Away"
This one gets repeated at every family gathering, and it's not always true. Renting makes financial sense in several situations:
- You're staying less than 3–5 years. Between closing costs (2–4% buying, 5–6% selling), you need several years of appreciation just to break even.
- You're in a career transition. If you might relocate in 1–2 years, renting preserves your flexibility.
- The buy-vs-rent math doesn't work. In some NJ markets, monthly rent is significantly less than owning when you factor in property taxes (NJ has the highest in the nation at ~$9,500/year average), maintenance (1–2% of home value annually), and insurance.
Owning builds equity over time — that part is true. But it's not automatic and it's not free. The right move depends on your timeline, your market, and your financial situation — not a bumper sticker.
The Bottom Line
Most home buying myths come from a good place — someone heard something that was true 10 years ago, or in a different market, and passed it along. But real estate is local and conditions change fast.
The best defense against bad advice is working with someone who knows the current data in your specific market. Not national averages. Not what worked for your cousin in Texas. The actual numbers in the NJ county you're buying in.
If you're thinking about buying in 2026, I'm happy to walk you through what the market looks like for your budget and target area — no pressure, no commitment.
Book a free consultation or call/text me at 609-582-1930.
Related Reading
- First-Time Home Buyer's Guide to New Jersey (2026) — the full step-by-step process from pre-approval to closing
- Why Mortgage Rates Don't Follow the Fed — what actually drives the rate you'll get
- How to Sell Your NJ Home for Top Dollar in 2026 — if you're selling before you buy
Mahesh Sangisetty is a licensed NJ Realtor (#2334343) at Boutique Realty, serving buyers across Hudson, Bergen, Middlesex, Essex, Mercer, Passaic, and 6 other NJ counties.