7 First Time Homebuyer Mistakes You Can Avoid

Written by Lilly Woodard

To err is human. The homebuying process is exciting, but it can also be overwhelming and confusing. However, learning about common mistakes first-time homebuyers make can help you avoid them in your journey to homeownership. Knowing these common mistakes and working to not repeat them will make your process much more enjoyable.

Take a look at some of the most common (and frustrating) first time homebuyer mistakes you don’t have to make:

1. Shopping for homes before you know how much you can afford.

Once you make the decision to buy your first home, browsing properties is probably the most exciting step of the home buying process – way more fun than figuring out those dreaded finances. However, you could end up wasting a lot of time looking at or visiting homes you can’t afford.

Instead, begin the home buying process by meeting with a mortgage lender and getting pre-approved so you know what budget you have. That way, when you start looking at houses, you’ll already have that peace of mind knowing you’re within your budget. Plus, when your dream home comes on the market, you will be ready to act!

2. Not finding the right loan for you.

A lot of first time homebuyers want or need to make smaller down payments. There are a number of loan programs available that allow you to do exactly that. Make sure to familiarize yourself with all first-time homebuyer programs, as well as loan programs such as VA Loans, USDA Loans, and FHA Loans. Find out more about the different types of loans that are available to you here!

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3. Writing off homes that have lingered on the market.

Sometimes, homes get passed over because they’ve been sitting on the market for a little longer than usual. Some homes may linger on the market longer than others due to their condition or similar reasons. However, a home may be on the market for a while because of very normal circumstances: being listed too high originally, not being marketed correctly, or needing some minor renovations.

If the house looks right to you, then don’t dismiss the option just because it has been on the market for a long time. It never hurts to have a showing for the house! It may end up being perfect for you.

4. Making “the wrong” down payment for you.

While you are most likely aware that the 20% down payment is not always necessary, putting down too little money can also be a mistake. The 20% down payment allows you to avoid mortgage insurance, but it can still be a significant amount, and you don’t want to deplete your savings. According to the National Association of Realtors, in 2024, the average down payment was only 9% for first-time homebuyers.

Make sure to review both numbers and determine what you’re comfortable with before making a commitment.

Need help covering your down payment? Explore assistance programs »

5. Opening a New Line of Credit or Making a Major Purchase Before Your Home Sale Is Final.

One of the most crucial periods in the home buying process is the time between applying for your mortgage and closing on your home. During this time, you want to leave your credit alone as much as possible. The lender will base the decision on your loan on your debt-to-income ratio and credit score. This means that applying for a car loan, credit card, or making a large purchase on credit can jeopardize your chance of getting a loan.

6. Being Impractical.

Buying your house should be an exciting time, but this is an important, financial decision. Don’t take it personally or get discouraged if your offer gets rejected. Many people can get carried away looking for their “unicorn” home that checks every single box. Perfection can be hard to find, so be sure to determine what you can compromise on to get as close as possible to your dream home. The probability of finding a home that fulfills every item on your wish list while remaining on budget is actually pretty low. Know what your priorities are and be willing to negotiate.

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7. Waiving home inspections.

It’s super exhilarating to be almost closed on your home, but don’t rush the process and waive the home inspection. The home inspection helps find things that you don’t see as easily during a normal walkthrough: mold, foundation damage, rotted wood, heating problems, and other significant and costly issues. The worst would be to close on your home, only to find out you missed some problems that a home inspector could’ve caught for you.

The most important thing to remember is that buying your first home is a learning process, and mistakes are inevitable. Educating yourself on the process and working with professionals you trust is key. If this seems like a lot to take on, just remember that every homeowner has gone through the same process (some of them without the help of the internet). You’ve got this!

Sources:

• https://www.bankrate.com/mortgages/first-time-homebuyer-mistakes/#common-mistakes
• https://www.advantageccs.org/blog/5-big-mistakes-to-avoid-as-a-first-time-home-buyer/
• https://www.rocketmortgage.com/learn/first-time-home-buyer-mistakes
• https://www.zillow.com/learn/first-time-home-buyer-mistakes/
• https://www.nar.realtor/newsroom/first-time-home-buyers-shrink-to-historic-low-of-24-as-buyer-age-hits-record-high