7 First-Time Homebuyer Mistakes That Cost You Real Money

Buying your first home is exciting. It is also easy to slip up in ways that cost thousands. Here are seven mistakes we see all the time and how to avoid them.

1. Only talking to one lender

Banks and credit unions each have one menu. If you only get one quote, you have no idea if you left money on the table. Get at least two or three. Better yet, work with a broker who shops 100+ lenders so you see real competition. A quarter point on your rate can mean tens of thousands over the life of the loan.

2. Skipping the pre-approval

A pre-approval tells sellers you are serious and shows how much you can spend. Without it, you are guessing. You might fall in love with a house you cannot afford or lowball yourself. Get pre-approved before you start looking. It does not lock you in. It just gives you a clear budget and a stronger offer.

3. Ignoring your credit until the last minute

Lenders pull your credit when you apply. If you have errors or old debt, fix them before you shop. Pay down cards if you can and avoid new credit right before or during the process. A few points can change your rate or even your approval.

4. Draining your savings for the down payment

Putting 20% down avoids PMI, but not if it leaves you with no emergency fund. Repairs and moving costs add up. Most experts say keep three to six months of expenses in the bank. If that means a smaller down payment and some PMI, that is often smarter than being house-poor and cash-broke.

5. Skipping the inspection

Waiving the inspection might win a bidding war. It can also leave you with a money pit. If you are in a hot market, at least get a limited or walk-through inspection. Know what you are buying. Surprises after closing are the worst kind.

6. Not reading your loan estimate

Your loan estimate shows rate, fees, and closing costs. Compare it to other offers. Check for junk fees and make sure the rate and term match what you discussed. If something looks wrong, ask before you sign. Once you close, it is much harder to fix.

7. Assuming you do not qualify

A lot of first-time buyers assume they need perfect credit or a huge down payment. FHA, VA, and conventional programs exist for real people with real histories. Do not rule yourself out. Run the numbers. Take our quiz and see what you qualify for. It takes 60 seconds and does not pull your credit. You might be closer than you think.