Buying your first home is exciting, but in today’s competitive and high-interest-rate market, small mistakes can cost you thousands—or even derail your purchase. Here are 7 costly mistakes to avoid as a first-time homebuyer:
1. Skipping Mortgage Pre-Approval
Why it’s bad: Without pre-approval, you don’t know your true budget, and sellers may ignore your offer.
Fix: Get pre-approved (not just pre-qualified) to lock in rates and strengthen your position.
2. Overlooking Hidden Costs
Beyond the down payment, you’ll face closing costs (2–5% of loan), property taxes, insurance, maintenance, and possibly HOA fees.
Fix: Budget for at least 3–5% extra beyond the purchase price.
3. Stretching Your Budget Too Thin
Today’s high prices + high rates mean monthly payments are steep.
Fix: Stick to the 28/36 rule (max 28% of gross income on housing, 36% on total debt).
4. Ignoring Loan Options & Assistance Programs
FHA, VA, USDA, and first-time buyer programs offer low down payments (some as low as 3%).
Fix: Compare loan types and ask lenders about special programs.
5. Skipping the Home Inspection (Even in a Hot Market)
Waiving inspection risks costly surprises (foundation issues, mold, etc.).
Fix: Opt for an inspection contingency or, if competing, a pre-inspection.
6. Not Shopping Around for Lenders
Even a 0.5% lower rate saves $100+/month on a $300K loan.
Fix: Compare at least 3 lenders, including credit unions and online lenders.
7. Letting Emotions Override Logic
Bidding wars and FOMO can lead to overpaying or ignoring red flags.
Fix: Set a firm max budget and walk away if it doesn’t make financial sense.
Bonus Tip: Watch Out for Adjustable-Rate Mortgages (ARMs)
Low intro rates may tempt you, but if rates rise, your payment could skyrocket.
Fix: If you choose an ARM, ensure you can refinance or afford future hikes.
Bottom Line
Today’s market is tough, but avoiding these mistakes will keep you financially secure. Get pre-approved, budget wisely, and don’t skip due diligence!
