Stacey's Blog
5 Common First-Time Homebuyer Mistakes (and How to Avoid Them!)
Buying your first home is exciting, but it can also feel overwhelming, especially in a fast-moving housing market. Whether you’re wanting a cozy starter home or a long-term family haven, it’s important to go into the process feeling prepared and confident.
To help, we’ve outlined five common mistakes many first-time homebuyers make and how to avoid them. With the right strategy, your homebuying journey can be smooth, stress-free, and enjoyable!
Mistake #1: Looking for a Home Before Getting Pre-Approved
It’s easy to get caught up in scrolling through listings and touring homes, but in a competitive market, sellers expect buyers to be pre-approved before they make an offer. Without pre-approval, you risk losing out on a home you love to another buyer who’s already financially prepared.
How To Avoid It:
- Get a fully underwritten pre-approval before you start house hunting. This shows sellers that your offer is serious.
- Work with a lender who thoroughly reviews your credit, income, and assets upfront so you know exactly what you can afford.
Taking this step early will give you peace of mind and help you confidently make an offer.
Mistake #2: Buying a Home Over Your Budget
We get it, it’s easy to fall in love with a home that stretches your budget. But overextending yourself financially can lead to stressful monthly payments and make handling unexpected expenses like home repairs or medical bills harder.
How To Avoid It:
- Focus on what you can comfortably afford each month, not just the maximum loan amount you qualify for.
- Consider potential future costs like property taxes, maintenance, and insurance to ensure your budget is realistic.
Your new home should enhance your life, not add financial pressure. Finding the right balance is key!
Mistake #3: Making Changes to Your Credit Before Closing
Many homebuyers don’t realize that lenders check their credit again right before closing. If you take out a new loan, finance a big purchase (like a car or furniture), or close an old credit account, it can impact your loan approval or even change your mortgage terms.
How To Avoid It:
- Avoid applying for new credit cards, taking out loans, or making big purchases until you’ve closed on your home.
- If possible, pay down the existing credit balance to keep your score strong.
It might be tempting to start buying furniture for your new home but hold off until your have the keys!
Mistake #4: Holding Out for the “Perfect” Home
It’s completely normal to have a vision of your dream home, but waiting for a house that checks every single box can mean missing out on great opportunities. No home is perfect, but many can be perfect for you with a bit of flexibility.
How To Avoid It:
- Decide ahead of time which features are must-haves, and which are nice-to-haves.
- Be open to homes that might need minor updates, some loan programs even allow you to finance renovations into your mortgage.
Sometimes, a little creativity and sweat equity can turn a great house into the home of your dreams!
Mistake #5: Not Exploring All Mortgage Loan Options
Many first-time homebuyers think they need a huge down payment to buy a home, but that’s not always true! There are several loan programs designed to help first-time homebuyers with flexible credit requirements, lower down payments, and even down payment assistance.
Here are three popular options to consider:
FHA Loan – An Option for Affordable First-Time Homeownership
Pros:
- 3.5% down payment required
- Easier credit & income qualifications
- Allows up to 6% seller credits to help with closing costs
- Gift funds can be used for the down payment
Cons:
- Requires monthly mortgage insurance
- Mortgage insurance is permanent for the life of the loan
VA Loans – Specialized Options for Veterans and Military Service Members
Pros:
- No down payment required
- No monthly mortage insurnace
- Lower monthly payments
Cons:
- Only available to eligible veterans, active-duty military, or surviving spouses
- Has an upfront funding fee (can be rolled into loan)
USDA Loans – Designed for Purchasing Homes in Rural Areas
Pros:
- No down payment required
- Flexible credit & qualifying guidelines
- Can refinance repairs & closing costs into the loan
Cons:
- Geographic restrictions – must be in an eligible area
- Income limits apply
- For owner-occupied single-family homes only
Final Thoughts
Buying a home is a big life milestone, and with the right preparation, it can be a smooth and exciting journey. The key is to:
- Get pre-approved early
- Set a realistic budget
- Keep your credit stable
- Stay open-minded about home options
- Explore loan programs that can help you save
When you’re ready to take the next step, my team at VanDyk Mortgage is ready to help! Contact me today to start your homebuying journey with confidence.