Buying Your First Home? Avoid These Common Pitfalls
Purchasing a home is a huge milestone, but many first-time buyers make costly mistakes. Here’s what you need to watch out for.
1. Not Checking Your Credit Score
Your credit score affects your mortgage approval and interest rate. A low score can result in higher monthly payments.
- ✅ Check your credit report for errors.
- ✅ Pay down credit card balances to improve your score.
- ✅ Avoid opening new credit accounts before applying.
2. Underestimating Closing Costs
Many buyers focus on the down payment and forget about closing costs, which range from 2-5% of the home price.
- ✅ Ask the lender for a Loan Estimate before closing.
- ✅ See if the seller can cover some closing costs.
- ✅ Look for first-time homebuyer programs that help with fees.
3. Skipping Mortgage Pre-Approval
House hunting without a pre-approval letter can result in lost deals. Sellers often prioritize buyers who are pre-approved.
- ✅ Get pre-approved before shopping for homes.
- ✅ Compare multiple lenders to find the best mortgage rates.
- ✅ Don’t make large purchases before closing (e.g., new car, furniture).
4. Not Budgeting for Maintenance
Homeownership comes with ongoing costs. Expect to spend 1-3% of the home's value annually on maintenance and repairs.
- ✅ Set aside a home repair fund.
- ✅ Get a home inspection to identify hidden issues.
- ✅ Consider a home warranty for appliance coverage.
Using a Home Buying Checklist
To avoid costly mistakes, follow our comprehensiveHome Buying Checklist for a smooth purchase process.
“Avoiding first-time homebuyer mistakes can save you thousands and make homeownership a smooth process.”
— Sarah Thompson, Real Estate Expert