Debunking the Biggest Myths About Mortgage Applications in Florida

Common Misperceptions

Many Florida homebuyers delay their mortgage journey because of outdated or misleading information. Myths about credit, income, down payments, and loan requirements continue to confuse buyers and discourage applications. That’s why LBC Capital is committed to helping clients make smart, informed decisions based on facts—not fear. Below, we break down the most common mortgage myths and explain how Florida buyers can move forward with confidence.

Myth 1: You Need a 20% Down Payment to Get Approved

The reality: Low down payment options are widely available

One of the most common misconceptions is that lenders require a 20% down payment to qualify for a mortgage. While putting 20% down can help you avoid private mortgage insurance (PMI) and reduce monthly payments, it’s not a requirement. In Florida, many homebuyers use programs that allow down payments as low as 3%. Some government-backed loans, like VA and USDA loans, offer zero-down financing for eligible borrowers.

Florida also offers down payment assistance programs to help first-time and qualifying buyers reduce upfront costs. LBC Capital helps clients explore all available options, including conventional, FHA, VA, and state assistance programs, to find the right solution for their financial goals.

Myth 2: You Need Perfect Credit to Qualify

The reality: You can qualify with less-than-perfect credit

Many people assume that unless their credit score is excellent—above 750—they won’t be approved for a mortgage. That’s not true. While your credit score does impact your loan terms and interest rate, many lenders work with borrowers who have scores in the 600s or even the high 500s, depending on the loan program.

In Florida, FHA loans are a popular choice for buyers with lower credit. LBC Capital helps clients improve their credit scores and present a strong application by looking at more than just credit—like steady income, manageable debt, and available savings.

Myth 3: Self-Employed Borrowers Can’t Get Mortgages

The reality: Lenders evaluate income differently, not unfavorably

If you’re self-employed, you may have heard it’s nearly impossible to get approved for a mortgage. That myth keeps many entrepreneurs and freelancers from even applying. In truth, lenders simply require more documentation to verify your income—usually two years of tax returns, profit and loss statements, and possibly business bank statements.

LBC Capital specializes in helping self-employed buyers structure their applications properly. We understand the unique challenges of variable income and know how to position your finances to meet lender requirements without unnecessary stress.

Myth 4: Preapproval Means You’re Fully Approved

The reality: Preapproval is just the beginning

Mortgage preapproval gives you a strong starting point when shopping for a home, but it’s not a guarantee of final loan approval. Lenders still need to verify your financial documents, order an appraisal, and conduct underwriting before issuing the final “clear to close.”

Any changes to your financial situation—like new debt, job changes, or missed payments—can affect your approval status. At LBC Capital, we provide ongoing support throughout the mortgage process, helping clients avoid common mistakes between preapproval and closing.

Myth 5: You Can’t Get a Mortgage with Low Income

The reality: Your debt-to-income ratio matters more than income alone

Many buyers think they don’t earn enough to qualify for a home loan. But income level alone doesn’t determine your eligibility. Lenders look at your debt-to-income (DTI) ratio, which compares your monthly debt payments to your gross monthly income.

If you have low debt and stable income, you may qualify even with a modest salary. LBC Capital helps clients calculate their DTI and find mortgage options that fit their budget. We also explore Florida programs designed to help low- to moderate-income families afford homeownership.

Myth 6: Your Interest Rate Is Locked from Day One

The reality: Rates fluctuate until you officially lock them

Many buyers think the rate quoted in their preapproval is set in stone. In reality, mortgage interest rates change daily, and the rate you’re offered can shift before closing unless you officially lock it. Timing your rate lock is essential, especially in a changing market.

LBC Capital monitors rate trends and helps you decide the best time to lock based on your loan type and closing schedule. We protect your rate—and your budget—from unexpected market swings.

Myth 7: You Must Use the Lender That Preapproved You

The reality: You can (and should) shop around

Preapproval gives you a clear idea of your buying power, but you’re not obligated to use the lender who issued it. You have the right to compare offers and choose the lender that provides the best terms and service.

At LBC Capital, we encourage clients to compare rates, fees, and terms. We provide transparent advice to ensure you’re making the most informed financial decision—without pressure.

Myth 8: Homeowners Insurance Covers Flood Damage

The reality: Flood insurance is typically separate

In Florida, where tropical storms and flooding are common, many buyers assume their homeowners insurance covers all types of water damage. Unfortunately, most standard policies do not include flood protection.

If your home is in a designated flood zone, your mortgage lender will likely require a separate flood insurance policy. Even outside these zones, it’s a wise investment. LBC Capital educates buyers on all insurance requirements during the mortgage process and helps you prepare for hidden costs.

Myth 9: You Need 20% Equity to Refinance

The reality: Refinancing is possible with less equity

Some homeowners avoid refinancing because they believe they need 20% equity to qualify. While having more equity can unlock better terms, many refinance programs allow you to move forward with much less.

Programs like FHA Streamline and VA IRRRL offer flexible options, even if your home hasn’t appreciated significantly. LBC Capital evaluates your current mortgage, home value, and financial goals to determine if refinancing makes sense—regardless of your equity level.

Myth 10: Renting Is Always Cheaper Than Owning

The reality: Buying may be more affordable over time

With Florida’s rising rent prices, owning a home is often more cost-effective than renting. Mortgage payments can be fixed, while rent tends to increase year after year. Plus, homeownership builds equity, offers tax advantages, and gives you long-term control over your property.

LBC Capital helps clients compare the long-term cost of renting versus owning, taking into account property taxes, insurance, and maintenance. For many, buying a home is not only affordable—it’s financially smarter.

Why Florida Buyers Choose LBC Capital

Navigating mortgage options can be overwhelming, especially with so many myths and half-truths circulating online. That’s why Florida buyers turn to LBC Capital for trusted, transparent guidance.

We simplify the mortgage process by offering personalized solutions, explaining every step, and avoiding generic advice. Whether you’re a first-time buyer, a self-employed borrower, or looking to refinance, we tailor our services to your unique needs.

LBC Capital understands the Florida market—its flood risks, property insurance challenges, and regional programs. We help you avoid costly mistakes, uncover better financing options, and get you to closing smoothly.