The Most Common Mistakes First-Time Homebuyers Make (and How to Avoid Them)

Disclaimer: This content is for general information only and is not financial, tax, legal, or mortgage advice. Always consult licensed real-estate, mortgage, and tax professionals about your specific situation.

Buying your first home is thrilling—but it’s easy to misstep. Below are the pitfalls professionals see most often, plus practical ways to sidestep them and keep your path to homeownership smooth.

1. Not Knowing What You Can Really Afford

Mistake: Shopping before you know your true budget—or relying solely on the lender’s maximum “qualifying” amount.

Smart move:

• Start with a mortgage calculator and aim to keep total housing costs at or below ~30 % of gross monthly income—a long-standing rule of thumb endorsed by consumer-finance experts.¹
• Stress-test the payment by adding other fixed bills (student loans, childcare, car payments) to be sure you can still save and handle surprises.

2. Skipping the Mortgage Pre-Approval

Mistake: Touring homes or writing offers without a pre-approval letter.

Smart move:

• Secure pre-approval before house hunting; it shows sellers you’re serious and lets you act quickly.
• Remember a pre-approval letter typically expires after 60–90 days; refresh it if your search drags on.²

3. Underestimating Up-Front Costs

Mistake: Forgetting expenses beyond the down payment.

Smart move:

Typical up-front costs:

• Closing costs: 3%–6% of the loan amount³
• Home inspection: $300–$600
• Appraisal fee: $400–$700
• Moving, utility deposits, first-year insurance, etc.: Varies

4. Not Shopping Around for a Mortgage

Mistake: Accepting the first loan quote—often from your everyday bank.

Smart move:

• Collect Loan Estimates from at least three to five lenders; Freddie Mac research shows borrowers who get four or more quotes can save $600–$1,200 per year in interest.⁴
• Multiple credit pulls made within a 45-day “rate-shopping” window count as a single inquiry for FICO scoring, so comparison shopping won’t tank your score.⁵

5. Overlooking Ongoing Homeownership Costs

Mistake: Focusing only on the mortgage payment.

Smart move:
Add property taxes, homeowners insurance, HOA dues (if any), utilities, and annual maintenance (plan on 1 %–3 % of the home’s value) to your budget.⁶

6. Pricing Your Offer Wisely

Mistake: Either lowballing and losing out, or overbidding in a frenzy.

Smart move:

• Base offers on recent comparable sales and current market momentum.
• In many 2024-25 markets, bidding wars have cooled as inventory grows, giving buyers more leverage.⁷ Rely on your agent’s data, not emotions.

7. Letting Emotions Take Over

Mistake: Falling in love with a property and ignoring red flags.

Smart move:
Keep a “must-have vs. nice-to-have” list. If the house fails key criteria or busts the budget, walk away.

8. Skipping (or Waiving) the Home Inspection

Mistake: Waiving the inspection contingency just to win.

Smart move:

• Always get a full inspection; only about one-fifth of buyers waived it in late 2024.⁸
• Consider specialized add-ons—radon, sewer-scope, roof—when local norms or the primary inspector recommend them.
• Even if you must waive the contingency, see if the seller will permit an “informational” inspection so you still understand the home’s condition.

9. Changing Jobs or Finances Before Closing

Mistake: Switching employment, buying a car, or taking on new debt during underwriting.

Smart move:

• Lenders re-verify employment about 10 days before closing.^{9 10}
• If you must change jobs, tell your loan officer immediately so they can document stable income.¹¹

10. Forgetting to Plan for the Future

Mistake: Buying a home that will be too small, too far from work, or otherwise unsuitable in a few years.

Smart move:
Think five to ten years ahead—career, family size, lifestyle. A little foresight can spare you an early (and expensive) move.

Final Tip

Learn from others’ missteps, keep emotions in check, and surround yourself with trusted pros. With a clear plan, you’ll save money, reduce stress, and move into a home that truly fits your life.

Need more first-time buyer guidance?
Explore our blog or try the free mortgage calculator to see how different down payments, rates, and terms shape your budget.

Sources