🏡 Mortgage Myths Charleston Buyers Should Stop Believing in 2025

March 12, 2025
Matt Doby
Mortgage News

In the world of real estate finance, misinformation is everywhere. If you’ve been holding back on purchasing a primary residence, second home, or investment property in Charleston, Summerville, or the Lowcountry, there’s a good chance you’ve heard outdated advice or straight-up mortgage myths.

Whether you’re a first-time buyer or a seasoned investor, debunking these misconceptions could be the difference between sitting on the sidelines and strategically building wealth through real estate.

Let’s separate fact from fiction.

💸 Myth #1: You Must Have a 20% Down Payment to Buy a Home

Let’s get this out of the way—you don’t need 20% down to buy real estate.

While putting down 20% avoids private mortgage insurance (PMI) and opens the door to better jumbo terms, there are smart, low-down-payment options designed to help preserve liquidity:

✅ FHA loans: Start at just 3.5% down
✅ VA loans: 0% down for qualified veterans
✅ USDA loans: 0% down for eligible rural/suburban areas
✅ Down payment assistance programs (state & local)

Even for luxury buyers, many high-income earners use strategic asset-based lending or first-time buyer programs to maintain financial flexibility.

📊 Myth #2: You Need a Perfect Credit Score

A high credit score opens doors—but perfection isn’t required.

Most lenders have programs for buyers with moderate to strong credit, and we often help clients optimize their file during pre-approval to improve pricing before locking in.

💡 A 720+ FICO will unlock strong rates, but even buyers in the 620–680 range may qualify for government-backed or DPA-assisted loans.

💼 Myth #3: The Lowest Rate is Always the Best Option

This one trips up even financially savvy borrowers.

A low advertised rate can mask:

Higher upfront fees or points
Less flexible loan terms
Higher lifetime cost

Instead, look at total cost of ownership, including:

Closing costs
Prepaid interest
Mortgage insurance
Early payoff options

🎯 For many clients, a slightly higher rate with better terms saves more in the long run.

📝 Myth #4: Pre-Qualification and Pre-Approval Are the Same

They’re not. And your offer’s competitiveness depends on the difference.

Pre-qualification: A soft estimate based on self-reported numbers
Pre-approval: A fully underwritten snapshot of your borrowing power—verified, documented, and ready to present with your offer

In Charleston’s competitive market, serious buyers get pre-approved first.

🏘️ Myth #5: Renting Is Always More Affordable Than Owning

Short-term? Sometimes. Long-term? Rarely.

With rising rents across Charleston and the Southeast, many buyers find that owning not only stabilizes housing costs, but builds long-term equity.

Plus, homeownership offers:

Tax deductions
Capital appreciation
Potential cash-flow through ADUs or short-term rentals
Legacy asset potential for family wealth transfer

💡 Whether you’re buying a downtown pied-à-terre or a Daniel Island estate, your money should be working harder than rent allows.

🔍 Bonus Myth: Jumbo Loans Are Only for the Ultra-Wealthy

Today’s jumbo and non-QM programs have evolved.

Even mid-range homes in Charleston, Mount Pleasant, or Summerville often exceed conforming loan limits. The good news? We offer jumbo loan options with:

Competitive rates
Flexible income documentation
No mortgage insurance
Tailored terms for high-net-worth borrowers

🔑 Final Thoughts: Build Wealth, Not Worry

Smart homebuyers and real estate investors don’t just take what they hear at face value—they build relationships with advisors who understand strategy, not just sales.

At The Local Ledger, we simplify the mortgage process for high-earning professionals, veterans, and families who want clarity, confidence, and competitive lending solutions.

👉 Ready to move forward with facts, not fear?

Click here to get pre-approved
or
Schedule a free strategy call to explore jumbo, VA, and low-down-payment options across the Lowcountry.