According to a recent Veterans United Home Loans poll of homebuyers who intend to make a purchase within the next three years, an estimated 46% of respondents believe a conventional loan requires more than 5% of a down payment, and some 57% believe they need at least a 660 credit score to qualify for a mortgage. The survey showed that prospective buyers frequently have misconceptions regarding credit scores, down payments, and mortgage rates, which complicates the process and adds needless obstacles.
Simultaneously, approximately 66% of prospective buyers stated that obtaining the best interest rates requires nearly impeccable credit. In actuality, a lot of purchasers with significantly less-than-perfect credit, lower credit scores, and smaller down payments can still qualify.
“When buyers think they need perfect credit or a huge down payment, they can take themselves out of the game before they even get started,” said Chris Birk, VP of Mortgage Insight at Veterans United. “The truth is there are flexible loan options designed to help people buy sooner, often with less upfront cash and more forgiving credit requirements than they expect.”
The survey reveals a recurring trend: Despite the difficult affordability climate of today, prospective buyers frequently overestimate the requirements for obtaining a home loan. More than a third of home purchasers nationwide (34%) think that in order to be eligible for a mortgage, your score must be at least 700. In reality, a credit score of about 620 is sufficient for many buyers to obtain financing, and certain loan programs permit even lower scores.
Expectations for down payments exhibit a comparable disparity. Further, the survey revealed that roughly 15% of prospective buyers think a 20% down payment is necessary, while almost half (46%) think you need to put down more than 5% for a traditional loan. In actuality, conventional financing typically requires a minimum of 5%, while some first-time purchasers may be eligible for a conventional loan with as little as 3% down. VA and USDA loans have no down payment requirements, while FHA loans only require a 3.5% down payment.
Note: The survey was conducted from March 13 to March 24, 2026, of 400 veterans and civilians who intend to buy a home in the next three years.
Homebuyer Requirements, Education & Mortgage Rates
There is still a lack of general knowledge about mortgage choices with low or no down payments. A down payment is necessary to purchase a home, according to nearly one-third (31%) of potential buyers. There are common misunderstandings about mortgage rates that go beyond qualifying requirements.
Even for consumers without exceptional credit, government-backed loans frequently have some of the lowest average rates available. For instance, borrowers with a score of about 620 are typically eligible for VA loans, while those with a score as low as 580 can apply for FHA loans.
Additionally, there is a great deal of uncertainty around who sets mortgage rates. Approximately 66% of respondents think the Federal Reserve directly sets mortgage rates, while 61% feel the government controls what lenders can provide.
Although the Fed’s actions have an indirect effect on mortgage pricing, lenders actually set their own rates. According to survey results, a large number of potential purchasers are unaware of the historical background of current mortgage rates. Despite averages of about 6% over the survey period, about 63% of respondents stated they think rates are at their highest position ever.
According to Freddie Mac, borrowing costs have historically been far higher, with rates over 10% throughout the majority of the late 1970s through the early 1990s and peaking at 18.6% in October 1981. This disparity highlights the possibility that present perceptions do not correspond with longer-term market realities.
“Mortgage rates aren’t one-size-fits-all – they can vary significantly based on the lender, the loan program and the borrower’s overall profile,” Birk said. “That’s why it pays to shop around and compare rates, costs and fees among multiple lenders. And while the Federal Reserve plays an important role in the broader economy, markets are typically pricing in expected Fed moves well before any official decision is announced.”
Many consumers think they have a firm grasp on the process despite these pervasive knowledge gaps. Over half (56%) claim to be extremely or very knowledgeable about purchasing a property. That assurance contrasts with the amount of purchasers who don’t comprehend basic ideas like credit standards, down payments, and how rates are calculated.
“Getting good information early can make a meaningful difference,” Birk said. “When buyers understand what’s actually possible, they’re in a much better position to make confident, informed decisions about when and how to move forward.”
However, there is still a high desire for homeownership. Accurate information might be crucial as buyers get ready to enter the market, as nearly 9 out of 10 respondents (87%) stated that buying a home is one of the most important goals in life.
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