20 Biggest Mistakes First-Time Homebuyers Make
Avoid the biggest pitfalls first-time homebuyers make, from hidden costs to emotional decisions, so you can land your dream home without regrets!
- Alyana Aguja
- 6 min read
Buying a first home is a very exciting affair, but expensive mistakes would make that homebuying dream turn nightmarish. From skipping inspections to underestimating extra costs, many first-time homebuyers fall into traps that make them later regret. If you understand these common pitfalls and plan ahead, you will confidently steer yourself through the process and come out with a smart, stress-free investment.
1. Not Getting Pre-Approved for a Mortgage
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Most homebuyers think they can afford a house without knowing their borrowing power. Without pre-approval, you might fall in love with a house only to find out it’s out of reach. In addition, you become a much stronger buyer in the eyes of sellers.
2. Ignoring Hidden Costs
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Your mortgage isn’t the only expense—property taxes, maintenance, insurance, and HOA fees add up fast. Many first-time buyers stretch their budget to the max, leaving no room for unexpected repairs—always budget beyond just your monthly payment to avoid financial stress.
3. Skipping the Home Inspection
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A home may look great, but hidden problems could be lurking beneath. Without an inspection, you are buying a house that could have major structural or electrical issues. Saving a few hundred dollars upfront might save you thousands later in repairs.
4. Not Shopping Around for a Mortgage
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Many home buyers opt for the first lender they meet without taking time to explore better deals elsewhere. The interest rate and other terms of a loan can save or cost a family thousands over the life of a loan. Shop around among lenders for the best possible deal.
5. Getting House-Struck Without Looking at the Neighborhood
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A home isn’t just about what’s inside—it’s also about where it’s located. Failing to research crime rates, schools, and commute times can lead to regret. Drive around at different times of the day and talk to neighbors to get a real feel for the area.
6. Draining Savings for the Down Payment
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It is easy to put all your money in the down payment to decrease your mortgage amount. However, this leaves you without an emergency fund for surprise home expenses. Keep a cushion of finances in case of repair, moving, and life’s surprise.
7. Making Emotional Decisions
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Buying a home is exciting, but allowing emotions to hang above what you are doing will lead to bad choices. Some buyers fall in love with a house, such as foundation problems or an overpriced listing, and they ignore it. Keep within your budget and must-haves, no matter how much you love the kitchen.
8. Overlooking First-Time Homebuyer Programs
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Many states and cities offer first-time buyers assistance programs, grants, or lower interest rates. Not exploring these options can mean leaving money on the table. Do your research—you might qualify for down payment assistance or tax breaks.
9. Not Understanding Loan Types
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There are many different types of mortgages: FHA, VA, and conventional, each with pros and cons. If you pick the wrong one for your situation, you could be paying thousands in interest or unnecessary fees. Work with a knowledgeable lender who can explain your best options.
10. Skipping a Final Walkthrough
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Some home buyers assume all will be left as agreed to at closing. You might have last-minute damages, missing appliances, or incomplete repairs, and a final walk-through usually catches this; always check before signing for unwelcome surprises.
11. Creating New Debt Pre-Closing
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Lenders check your credit again before finalizing your mortgage. If you buy a new car or rack up credit card debt, it can lower your credit score and jeopardize your loan approval. Wait until after closing before making any big purchases.
12. Underestimating Closing Costs
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Many buyers focus on the down payment but forget about closing costs, which can be 2-5% of the home price. These fees include lender charges, title insurance, and property taxes. Budget accordingly so you’re not caught off guard at closing.
13. Ignoring Future Resale Value
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You might love it today, but do others really want to buy it tomorrow? Bad layout, location, or distinctive features can impact the resellability of the house. Always look for something long-term if you plan to live there for some time.
14. Not Trying to Negotiate with the Seller
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Many first-time buyers take the listing price without asking questions. In most cases, there is always a bit of room to negotiate repairs, closing costs, or even the price itself. A good real estate agent can help you negotiate the best deal.
15. Not Buying Homeowner’s Insurance
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Others take the first quote they can get, but they vary widely in terms of rates. You can save hundreds of dollars per year when you shop around. Be sure to cover your policy with potential risks in your locality, like floods or earthquakes.
16. Failure to Budget Home Maintenance
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Owning a home means unexpected repairs—water heaters break, roofs leak, and pipes burst. Many new homeowners don’t set aside money for ongoing maintenance. Experts recommend saving 1-3% of your home’s value yearly for upkeep.
17. Choosing the Wrong Real Estate Agent
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An inexperienced or pushy agent can lead you into a bad deal. Your agent should be more concerned with your needs than with their commission. Interview several agents and choose one with good reviews and strong local knowledge.
18. Not Considering Commute and Lifestyle
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A dream home isn’t so dreamy if you spend hours in traffic daily. Some buyers focus too much on the house and forget to consider commute times, nearby amenities, and lifestyle factors. Make sure the location aligns with your daily routine.
19. Rushing the Process
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Buying a home is a major financial commitment, yet some buyers feel pressured to act quickly. Skipping research, inspections, or due diligence can lead to regret. Take your time to ensure you’re making the best decision.
20. Not Reading the Fine Print
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The closing documents contain all crucial information about your loan, fees, and responsibilities. Most buyers rush through signing without really understanding what they are signing. Always review documents or get someone to explain them before committing to them.