First-Time Homebuyer? Avoid These 5 Mistakes

🚨 Mistake #1: Not Checking Your Credit First

Why it’s bad:

• A low credit score can cost you thousands in higher interest.

• Some lenders deny mortgages below 620 FICO.

How to fix it:
✔ Check your free credit report (AnnualCreditReport.com).
✔ Pay down debts to keep credit utilization below 30%.
✔ Avoid new credit applications 3–6 months before buying.

Pro Tip: Even a 20-point increase can save $50+/month on payments.

💸 Mistake #2: Skipping Pre-Approval

Why it’s bad:

• Sellers prioritize pre-approved buyers.

• Without it, you might lose your dream home to a competing offer.

How to fix it:
✔ Get pre-approved (not just pre-qualified) before house hunting.
✔ Compare at least 3 lenders (rates vary widely).

Pro Tip: A strong pre-approval letter makes your offer more competitive.

🏠 Mistake #3: Ignoring Hidden Costs

Why it’s bad:
Many first-time buyers budget for the mortgage but forget:

• Closing costs (2–5% of home price).

• Property taxes & insurance (often escrowed).

• Maintenance & repairs (1–2% of home value yearly).

How to fix it:
✔ Save 3–6 months of expenses beyond the down payment.
✔ Use a home affordability calculator (NerdWallet, Bankrate).

Pro Tip: Ask the seller to cover closing costs in your offer.

📉 Mistake #4: Maxing Out Your Budget

Why it’s bad:

• Stretching your budget leaves no room for emergencies.

• Rising rates or job loss could lead to foreclosure.

How to fix it:
✔ Follow the 28/36 rule:

• 28% of gross income on housing.

• 36% max on total debt (including car loans, student debt).

Pro Tip: Just because you qualify for $500K doesn’t mean you should borrow it.

🔍 Mistake #5: Skipping the Inspection

Why it’s bad:

• “As-is” homes can hide $10K+ in repairs (roof, foundation, mold).

• Waiving inspection is risky even in hot markets.

How to fix it:
✔ Always get an inspection (costs $300–$500 but saves thousands).
✔ Negotiate repairs or credits after findings.

Pro Tip: Attend the inspection—ask questions!

💰 Bonus Mistake: Not Using First-Time Buyer Programs

Many miss out on:
✔ FHA loans (3.5% down + lower credit requirements).
✔ VA loans (0% down for veterans).
✔ USDA loans (rural buyers, 0% down).
✔ State/local grants (down payment assistance).

Example:

• First-time buyers in Texas can get $15K+ in assistance.