First Time Home Buyer Mistakes To Avoid

Buying your first home is exciting, but it can also be overwhelming—especially if you're new to the process or dealing with credit challenges. As a first-time buyer, understanding the first time home buyer mistakes to avoid can save you thousands of dollars and a lot of stress.

Whether you're just starting your journey or already knee-deep in listings, this guide will help you avoid the most common home buyer mistakes people make when searching for a home, getting a loan, and eventually owning their first property.

1. Not Checking Your Credit Score Early

According to Experian, the average credit score for homebuyers in the U.S. is around 716, but first-time buyers often fall below this threshold. This can impact your loan options and interest rates.

Mistake: Many buyers skip checking their credit report early or don't take time to improve it.

Solution: Check your credit at least 3–6 months before you start buying a home. Fix any errors, pay down debt, and avoid taking on new credit. Even a 20-point increase could save you thousands over the life of your mortgage.

Tip: A $200,000 mortgage at 6.5% interest costs $25,000 more over 30 years than the same loan at 5.5%. Credit matters!

2. Skipping Pre-Approval

First time home buyer mistakes to avoid often begin with skipping pre-approval. Pre-approval isn’t just a letter—it’s proof to sellers that you’re serious and qualified.

Mistake: Shopping for homes without knowing how much you can really afford.

Solution: Get pre-approved, not just pre-qualified. Pre-approval involves verifying your income, credit, and assets, giving you a realistic price range.

Stat: Buyers who are pre-approved are 58% more likely to have their offers accepted in competitive markets (source: Zillow).

3. Ignoring First-Time Buyer Programs

There are dozens of federal, state, and local programs designed to help first-time buyers, especially those with low credit or income.

Mistake: Overlooking homebuyer grants, down payment assistance, and special loan programs like FHA, VA, and USDA.

Solution: Research programs in your area. FHA loans allow credit scores as low as 580 with 3.5% down, and some states offer up to $15,000 in assistance (source: HUD.gov).

Example: In Texas, the My First Texas Home program offers down payment assistance and 30-year fixed-rate mortgages for eligible buyers.

4. Underestimating Costs of Owning a Home

Owning a home means more than just a mortgage. There are property taxes, insurance, maintenance, HOA fees, and more.

Mistake: Budgeting only for the down payment and monthly mortgage.

Solution: Plan for at least 1% of the home’s value annually in maintenance costs and budget 2–5% for closing costs.

Example: On a $250,000 home, you might pay $3,000–$12,500 in closing costs and $2,500/year in upkeep.

5. Falling in Love With the Wrong House

When searching for a home, it’s easy to get emotional. But a home that “feels right” can hide major red flags.

Mistake: Ignoring location, commute, schools, or future resale value.

Solution: Make a list of “must-haves” and “nice-to-haves.” Get an inspection. Think long-term—will this home work for the next 5–10 years?

Stat: 44% of homebuyers regret rushing into a purchase, with the most common regret being the wrong location (source: Bankrate, 2023).

6. Not Working With a Trusted Realtor

Trying to buy a home solo can lead to costly mistakes, especially as a first-time buyer.

Mistake: Not having a professional advocate in your corner.

Solution: Work with a licensed realtor who understands the local market and can guide you around the most common home buyer mistakes.

Why it matters: Realtors help negotiate pricing, navigate inspections, understand contracts, and connect you with trustworthy lenders and inspectors.

7. Overextending Your Budget

Just because a lender approves you for $300,000 doesn’t mean you should spend it all.

Mistake: Maxing out your budget and leaving no room for emergencies.

Solution: Aim to spend no more than 28% of your monthly income on housing expenses. Leave space for savings, repairs, and lifestyle costs.

Example: If you make $3,500/month, aim to keep total housing costs under $980.

8. Not Comparing Mortgage Offers

Different lenders offer different rates, fees, and terms—even for the same buyer profile.

Mistake: Accepting the first mortgage offer you get.

Solution: Shop around. Get at least 3–5 quotes. Ask for loan estimates and compare side by side.

Stat: Comparing just three loan offers can save the average buyer over $1,500 in closing costs and tens of thousands in interest (source: Freddie Mac).

9. Forgetting About Resale Value

A home is both a personal space and a financial investment. Many first-time buyers forget to think ahead.

Mistake: Buying a home that may be hard to sell later.

Solution: Choose homes in growing neighborhoods, near schools, transit, or shopping centers. Think about what future buyers will value.

Tip: A home in a good school district can sell for up to 20% more than similar homes in lesser districts (source: Realtor.com).

10. Ignoring Phantom Costs

One of the sneakiest first time home buyer mistakes to avoid is failing to plan for phantom costs—those hidden or unexpected expenses that come with owning a home, beyond your mortgage and utilities.

What Are Phantom Costs?

Phantom costs are ongoing expenses that aren’t always obvious during the home buying process. These include:

• Property taxes (which can rise yearly)

• Homeowners insurance

• HOA (Homeowners Association) dues

• Lawn care and landscaping

• Pest control

• Routine maintenance (HVAC service, plumbing, electrical)

• Appliance repairs or replacements

• Emergency repairs (roof leaks, water heaters, etc.)

🔍 Example: A homeowner might budget $1,200/month for their mortgage but forget about an $85/month HOA fee, $150/month in property taxes, $100/month in insurance, and $100/month for lawn and upkeep—totaling an extra $435/month.

Why It Matters for First-Time Buyers

As a first-time buyer, you may have been renting where the landlord handled repairs and lawn care. Once you own, those responsibilities and costs are yours—and they can add up quickly.

Stat: Homeowners spend an average of $9,240 annually on hidden homeownership costs (source: Bankrate, 2023).

Solution: Budget for the Unseen

When calculating your budget, add 15–20% on top of your expected monthly mortgage to account for phantom costs. Also, build an emergency fund for surprise repairs.

Pro Tip: Before closing, ask the seller for a 12-month utility and maintenance history to help estimate these extra costs.

Final Thoughts: First Time Home Buyer Mistakes To Avoid

There’s no such thing as a perfect home, but there is such a thing as a smart purchase. By learning the first time home buyer mistakes to avoid, you're already ahead of the game.

Remember:

• Check your credit and improve it early

• Get pre-approved and stick to your budget

• Explore all first-time buyer assistance programs

• Work with a trusted local realtor

• Think beyond the house—location, maintenance, and resale matter

If you're in the Dallas-Fort Worth area and ready to buy your first home (even with credit challenges), I'm here to help you every step of the way.

Need Help Navigating the DFW Home Buying Process?

Reach out here. CONTACT ME

Let’s make your first home a smart move.

Sources:

• Experian: https://www.experian.com/blogs/news/2023/09/average-credit-score-homebuyers/

• Zillow Consumer Housing Trends Report 2023

• HUD.gov - First-Time Homebuyer Programs

• Bankrate 2023 Homebuyer Regret Survey

• Freddie Mac Mortgage Shopping Research

• Realtor.com 2023 School District Data

• Bankrate 2023 Hidden Costs of Homeownership Study