The Top 10 First Time Home Buyer Mistakes To Avoid

Homebuyer mistakes happen more often when first time home buyers are not prepared for the process. Buying your first home is a very exciting time in your life but can get very complicated and overwhelming quickly.

They say if you’re not making mistakes, you’re not learning; sometimes, it’s better to learn from other people’s mistakes than from yours.

One strong reason for avoiding these first time home buyer mistakes is to reduce or eliminate buyer’s remorse which is a common emotion that comes with making a huge purchase like this.

Why go down a wrong path you can clearly avoid?

When you’re taking on six-figure debt, it is best to do your due diligence, and learn from others before jumping in.

10 First Time Home Buyer Mistakes To Avoid 

Mistake #10: Not Researching Your Neighborhood

Researching a neighborhood can help you gauge your offer. You don’t want to pay too much for a property you could have bought for less had you known what similar houses in the area were going for.

Thankfully, home buying websites like Zillow, Trulia, Redfin now provides more than a house for sale with a price to help you understand a neighborhood before you buy.

You can find crime statistics, current taxes, the prior sales price of home, demographics, and schools in the area, and their ratings.

An agent who lives in the area you are home searching is also a very useful resource.

Mistake #9 Buying a Home Based on Emotions

Emotions and money don’t mix. It’s called cold hard cash for a reason; money has no feelings.

We’ve all heard about needs and wants but somehow putting this into practice can be difficult. Your emotions will make you see wants as needs. This is the primary reason why people buy homes they cannot afford.

Approach a major purchase and financial commitment like buying a house as logically as you can.

You don’t want to be house poor simply because you stretched yourself thin. Make a list of your needs and stick to it.

Mistake #8 Changing Jobs in the Middle of an Application

Your income and length of employment play a major role in the approval process. Anything that threatens your income such as a sudden job change makes the lender nervous.

Lenders like to see a long history of employment preferably at least 2 years or more. The longer you have been employed in the same industry by the same employer, the better.

It is best to avoid switching jobs until you have closed on your loan and have the keys to your home in hand.  If you get a new job offer, ask to start after closing on the purchase.

The moment you submit a mortgage application, don’t move a muscle. Literally!

Mistake #7 Applying For All Kinds of Credit

The home buying process from start finish takes approximately 30 -60 days. Well, now is not the time to run around applying for all kinds of credit in between your mortgage application.

You know how you go to the store and the clerk says: “would you like to save 10% on your purchase by applying for a credit card”?

Just say: No

Your underwriter will question every move that affects your credit or income because it also affects your ability to repay your mortgage which is the bank’s priority.

Another mistake you want to avoid making is maxing out your credit card(s). Remember what I said about not moving a muscle?

Mistake #6 Not Checking Your Credit Report and Score

The moment you decide you are interested in buying a home, check on your credit score even before you contact a lender, or submit an application with the bank.

If you discover any issues with your credit report, you can fix/dispute it on your own.

Derogatory comments on your credit report affect your credit score. Your credit score affects your interest rate and your interest rate affects your mortgage payment.

Here’s something else you may not know. Your credit score also determines your private mortgage insurance (PMI) payment.

A credit report fix can take at least 30-60 days to reflect positively on your report. That is time you don’t have once you have already submitted the application to a lender.

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Mistake #5 Not Getting a Pre-qualification Letter

After knowing how much home you can afford, you still need a prequalification letter from a lender. We are now in a seller’s market meaning the supply of homes for sale in the market is less than there are buyers.

Competition is tight. You have people bidding above asking prices or paying cash for a home they want.

A seller is more likely to take you seriously if your offer comes with a pre-qualification letter. It shows you have potential financial backing from a potential lender.

If a seller gets 3 offers on his home and yours is the only one with a pre-qualification, your offer is more likely to be accepted – unless the other buyers are paying cash.

Mistake #4: Not Budgeting For Additional Expenses

You don’t want to be house poor. House poor is being in a situation where all of your income is going into your mortgage and you don’t have room in your budget for anything else. I mean nothing else!

You’ll need money beyond down payments and closing costs which is the one thing everyone talks about. But there are upfront costs before the down payment such as inspection, application fee, and the appraisal fee.

When you own a property, surprise expenses come up all the time. Build your reserves.

Closely related to this is the fact that your homeowner’s insurance and taxes could go up every year. So even though you have a fixed-rate mortgage where your principal and interest stays the same forever, taxes and insurance changes annually.

You and your budget need to stay ready for this change because not paying your taxes or homeowners’ insurance has major consequences.

Mistake #3: Not Knowing How Much You Can Afford

There are so many first time home buyer mistakes but this should probably be number one.

Most first time home buyers decide they want to buy a home and immediately go to the bank to get a pre-qualification. In this case, they let the loan officer tell them how much home they can afford.

Let’s get real here. You are the only one who knows how much home you can afford.

For instance, if you have children while renting and decide to buy a home, one cost the lender overlooks is your daycare expenses even though daycare might be costing you an upwards of $500 monthly.

There are also other monthly financial obligations such as; cell phone, heating, electricity, or cable that don’t show up on your credit report so the lender doesn’t take into consideration even though you are responsible for them.

Mistake #2: Not Getting an Inspection

When I bought my first home, I did not get an inspection. That one decision would come back to haunt me over the years after closing on the property.

Buying a home is already expensive. You have to save for the down payment and closing costs. There are also upfront costs like the application and appraisal fee. You may feel like cutting corners here should be no big deal.

Don’t do it!

A home inspection will set you back about $200-$600 depending on the area and what kind of home you’re purchasing i.e single, multi-family, or condo.

But a home inspection can also save you from signing a bad deal and thousands of dollars.

Had I gotten an inspection, I would have found out that the plumbing needed to be replaced and could have asked the seller to either replace the bad pipes or taken the cost of replacement off the asking price.

Mistake #1: Not Educating Yourself

Since you’re taking this course, you’ve already avoided mistake numero uno! You see, that was easy.

Many home buyers undermine the process of educating themself before buying a home.

Not knowing will cost you –a lot. The mortgage crisis resulted in many foreclosures because millions of home buyers got caught up.  They were not educated enough to understand the terms of their loan and the risks involved before signing the document.


I made a few of these home buyer mistakes when I bought my first home. Even though I was fortunate in the long run, it’s best to avoid making the same home buyer mistakes.

Hope/luck is not a strategy when it comes to investing thousands of dollars. Can you add to this list of home buyer mistakes? Tell me in the comment section.

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About Ogechi

Hello, I'm Linda Ogechi. I'm a financial educator, real estate investor, and founder of OneSavvyDollar. I write to empower you into saving more, paying off debt, increasing your net worth, and building real wealth so you can achieve financial freedom

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