5 Scary Mortgage Myths Busted This Halloween (2026)
The biggest mortgage myths are that you need 20% down, perfect credit, and a perfect time to buy. They don’t hold up. Many loans allow 0% to 3.5% down, government-backed programs have flexible credit rules, and waiting has risks too. Here are five scary mortgage myths, busted, plus where rates stand this October.
Key Takeaways
- You don’t need 20% down. Conventional loans can start at 3%, FHA at 3.5%, and eligible VA and USDA borrowers may put 0% down.
- Credit doesn’t have to be perfect. FHA guidelines are built to be flexible.
- Rate shopping won’t haunt your credit. Multiple mortgage inquiries in a short window generally count as one.
- Rates: Freddie Mac’s 30-year average was 7.40% the week of October 15, 2026.
- Investors may qualify on rental income with a DSCR loan.
Halloween is the one time of year when a little fright is fun. Buying a home shouldn’t be scary, though. Below, we bust five of the most common mortgage myths, share where rates stand, and lay out the tricks and treats of buying a home this fall.
Where Do Mortgage Rates Stand in Mid-October 2026?
- Freddie Mac PMMS: The 30-year fixed-rate mortgage averaged 7.40% as of October 15, 2026, unchanged from the prior week. A year earlier it averaged 6.27%. The 15-year fixed averaged 6.71%, down from 6.73% the prior week. (Freddie Mac)
- Mortgage News Daily: The daily index for a top-tier 30-year fixed was 7.37% on October 16, 2026, after a sharp drop over the previous week brought rates to roughly three-week lows. On the same day, MND’s index showed 30-year FHA at 6.99% and 30-year VA at 7.01%. (Mortgage News Daily)
The takeaway: Rates are higher than they were a year ago, and they’ve been moving around a lot from day to day. That’s exactly why your loan program, credit profile, and timing matter. A licensed loan officer can show you real options for your own situation. Averages are just averages. Curious why rates swing so much? Read What Moves Mortgage Rates?
Myth #1: “You Need 20% Down to Buy a Home”
Busted. A 20% down payment lets you skip mortgage insurance on a conventional loan, but it isn’t required. Some conventional programs allow as little as 3% down for qualified buyers. FHA loans allow 3.5% down with a qualifying credit score. Eligible veterans and service members may qualify for VA loans with no down payment (see our VA home loan guide), and USDA loans offer zero-down financing in eligible areas.
Myth #2: “Your Credit Has to Be Perfect”
Busted. Good credit helps you get better pricing, but government-backed programs like FHA are built to be more flexible. A loan officer can also suggest steps that may improve your score before you apply.
Myth #3: “Prequalifying Will Wreck Your Credit”
Mostly myth. A preapproval usually includes a credit check, which may cause a small, temporary dip in your score. Credit scoring models generally count multiple mortgage inquiries within a short shopping window as a single inquiry. So comparing your options won’t haunt you. See Mortgage Broker vs. Bank for why shopping around pays.
Myth #4: “Rates Are High, So I Should Wait”
It depends. Nobody can predict where rates will go, and they’ve moved sharply in both directions this fall. Waiting could pay off. It could also mean higher prices or more competition later. Make the decision with real numbers for your budget and goals, not headlines alone.
Myth #5: “Investment Property Loans Require Tax Returns Showing Big Income”
Not always. DSCR (Debt Service Coverage Ratio) loans are mainly qualified on the property’s rental income compared with its housing payment, not your personal income. That makes them popular with real estate investors and self-employed borrowers. Learn more in What Is a DSCR Loan?
What Are the Tricks and Treats of Buying a Home This Fall?
Treats 🍬
- Fall often brings less competition than the spring rush.
- Sellers whose homes have sat on the market may be more open to negotiating.
- You could be settled in before the holidays.
Tricks 🎃 (to avoid)
- Opening new credit cards or financing a car while your loan is in process.
- Skipping the home inspection. Some haunted surprises hide behind the walls!
- Shopping for homes before you know your budget. Get preapproved first.
A Little Haunted-House Trivia
- Jack-o’-lanterns started as carved turnips in Ireland and Scotland. Immigrants to America switched to pumpkins, which were bigger and easier to carve.
- In some states, courts have weighed whether a seller should have disclosed a home’s “haunted” reputation. Disclosure rules for these so-called “stigmatized properties” vary by state. Always read your disclosures and ask questions!
What Mortgage Options Does Coastal Funding Corporation Offer?
Coastal Funding Corporation is a mortgage broker. That means we compare loan options from multiple wholesale lenders to find a good fit for you. Programs we work with include:
- Conventional loans: low-down-payment options for qualified buyers
- FHA loans: flexible credit guidelines and 3.5% minimum down
- VA loans: for eligible veterans, active-duty service members, and surviving spouses
- USDA loans: zero-down financing in eligible areas
- Jumbo loans: for loan amounts above conforming limits
- DSCR loans: investment-property financing based on rental income, available nationwide
We help with primary-residence purchases and refinances in Florida, South Carolina, and Tennessee, and with DSCR investment-property loans nationwide.
Frequently Asked Questions
What is the average 30-year mortgage rate right now?
Freddie Mac reported the 30-year fixed-rate mortgage averaged 7.40% for the week ending October 15, 2026. Your rate depends on your credit, down payment, loan type, and other factors.
How much do I need for a down payment?
It depends on the program. Conventional loans can start at 3% down, FHA at 3.5%, and eligible VA and USDA borrowers may qualify with no down payment.
Is fall a good time to buy a house?
Fall often brings less competition and sellers who are more willing to negotiate. The right time depends on your finances and goals.
What is a DSCR loan?
A DSCR loan is an investment-property mortgage that’s qualified mainly on whether the property’s rental income covers its debt payments, rather than on the borrower’s personal income.
Does getting preapproved hurt my credit?
A preapproval may cause a small, temporary dip in your score. Multiple mortgage inquiries within a short shopping window are generally treated as one.
What does a mortgage broker do?
A mortgage broker compares loan programs and pricing from multiple lenders on your behalf to help you find a loan that fits your needs.
Don’t Let Your Mortgage Haunt You. Let’s Talk!
Ready to trade mortgage myths for real answers? Call Coastal Funding Corporation at (833) 457-6500 or visit www.cfcmtg.com to talk with a licensed loan officer about your options.
About Coastal Funding Corporation
Coastal Funding Corporation (NMLS 103035) is a mortgage broker. We compare loan options from multiple wholesale lenders for purchases and refinances on primary residences in Florida, South Carolina, and Tennessee, and we offer DSCR investment-property loans nationwide. This article was written by our team and reviewed for accuracy as of the date shown.
Coastal Funding Corporation | NMLS 103035 | 534 S. Navy Blvd, Pensacola, FL 32507 | (833) 457-6500 | www.cfcmtg.com. Equal Housing Opportunity. This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, and property eligibility. Rates, terms, and programs are subject to change without notice. Rate figures cited are third-party market averages as of the dates shown and are not quotes or offers from Coastal Funding Corporation. Primary-residence loans offered in FL, SC, and TN; DSCR loans available nationwide.