Common First-Time Home Buyer Mistakes to Avoid

Congratulations! You’ve saved enough money, and you are ready to leave the world of renting behind to join the ranks of first-time homeowners. Buying a home can be a taxing and complex yet thrilling experience. But without the right preparation, it’s easy to fall into common traps that can make the journey more stressful than it needs to be.

7 First-Time Home Buyer Mistakes

Wherever you are in the homebuying process, it helps to know what to watch out for. Read on to discover some of the most frequent first-time home buyer mistakes and how to avoid them.

1. Skipping Mortgage Preapproval

Getting preapproved before you start house hunting gives you a realistic view of what you can afford and shows sellers you're a serious buyer. In competitive markets, it can give you an edge over buyers who haven’t taken this step. Skipping preapproval is one of the most avoidable first-time home buyer mistakes.

To get started, contact a few lenders to compare rates, terms, and loan types. A preapproval letter from the lender you choose can usually be issued in a few days and will help you shop with confidence.

2. Not Building Up Your Credit in Advance

Solid credit is essential to obtaining a mortgage loan, and not strengthening your score beforehand is a top first-time home buyer mistake. FICO credit scores range from 350 to 850. Anything above 800 is considered excellent and will secure the best loan rates, although the high 700s can still secure very good rates. Conventional mortgage loans typically require a minimum score of 620, although FHA and VA loans usually only require a combined minimum score of 580.

The higher your credit score, the lower your mortgage rate. If your score isn’t where you’d like it to be, it’s worth your time and effort to implement tried-and-true methods to raise your credit score. Even if your credit score is just OK, it helps to work on increasing it for up to a year before buying a home. Even a small difference in rates can typically save you thousands of dollars over the life of a loan.

3. Overextending Your Budget

While it's tempting to sacrifice all your savings to buy your dream home, don't spend everything you have on a down payment. Consider how much you'll need to spend on homeowners' insurance, closing costs, moving expenses, unforeseen repairs, and monthly mortgage payments before making an offer on a home.

Also, many first-time home buyers don't consider ongoing expenses like property taxes, maintenance, and utilities. Make sure to map out all monthly and annual costs you’re responsible for, so you're not caught off guard later. You may also want to set aside funds for decorating, furniture, landscaping, and home improvements, depending on the home you purchase.

4. Not Researching the Neighborhood

Ensuring that the home you buy suits your financial needs and is worth your hard-earned savings is important. However, as a first-time home buyer, it's also smart to take a step back and consider whether the same can be said for the neighborhood and surrounding area. Make sure the neighborhood fits your lifestyle. Check for nearby stores, evaluate the school district if you have kids, and visit at different times of the day and evening to get a feel for daily life. Be aware of neglected homes nearby, as they can affect property values.

5. Applying for Just Any Mortgage Loan

It might seem like loan terms and interest rates are always the same between lenders, but that’s not true. Rates and fees can vary between lenders, so talk to several to find the best rate. Look for a lender who offers guidance throughout the process and ask about options beyond traditional loans, like VA, FHA, or USDA programs, and see if you qualify.

6. Not Getting a Home Inspection

A home might seem to be ready, but it doesn’t guarantee that everything behind the walls is in great shape. A licensed inspector can uncover hidden problems like structural damage, plumbing leaks, or outdated electrical work. Skipping a home inspection is one of the most expensive first-time home buyer mistakes you can make.

Even a new-construction home deserves a home inspection. It’s easy to assume that because it’s brand new, nothing could possibly be wrong with it. However, the same plumbing or electrical defects, gaps, and cracks found in older homes can also show themselves in new homes. Bottom line? The cost for a good home inspection could potentially save you thousands of dollars down the road, regardless of the age of the property.

7. Buying Without a Real Estate Home Warranty

As mentioned, it’s a good idea to hold back some savings when buying a home, but you don't want to spend that on repairing or replacing home systems and appliances when they unexpectedly break. That’s why protecting your budget with home warranty coverage is one of the smartest things a first-time home buyer can do. After all, you never know when your oven, dishwasher, or other major home appliance will break, or a plumbing or electrical issue will pop up.

A home warranty from First American offers peace of mind when covered systems and appliances suddenly break down, allowing you to better stay on budget. You simply contact us when a covered household item stops working properly, and we’ll send a prescreened technician to diagnose the issue and either repair or replace it.*

Pro tip: When you’re buying a home, title insurance is another valuable safeguard that protects your right to purchase and use the property as you plan. Talk to your real estate agent about title insurance, why you need it, and find out more in our blog, Why Title Insurance Is Essential: 8 Common Title Problems Explained.

4 Mistakes to Avoid After You Move In

Once you’ve moved into your new home, you have a new adventure to begin. Homeownership can be quite different from renting, and there are plenty of adjustments first time home buyers must make after moving in. The most important adjustment is that everything, inside and out, is your responsibility to maintain. To start right, avoid these common beginner mistakes:

1. Walking on the Roof

It might be tempting to check your roof for damage or debris after you move in, especially if you’re eager to keep your home in good shape. Some new homeowners even consider using it for stargazing or relaxing. But walking on your roof can cause damage to the shingles and structure, and put you at risk of injury. It’s best to leave roof inspections to professionals.

2. Using Attic or Garage Space Incorrectly

Many homeowners assume attics and crawlspaces are safe for storage. Before storing anything heavy, check with a structural engineer to make sure the attic space can support the weight. Sometimes, the trusses in these empty spaces support your roof or ceilings and can't handle the additional weight of stored items. If needed, a contractor can reinforce the trusses to make the space usable. However, because of the dampness and potential for mold and mildew, the crawlspace is typically a poor choice for storage.

3. Not Checking Sprinklers

One thing you probably didn’t factor into your home-buying decision is the outdoor sprinkler system. But even a small installation error or a bumped sprinkler head can send water onto your home’s exterior instead of your landscaping. While it might not seem like a big deal, constant spraying can lead to wood rot, foundation issues, and dying plants. Depending on your climate, it's a good idea to inspect your sprinkler system regularly.

4. Not Enrolling in a Home Warranty Plan

You’ve worked hard to buy your first home; the last thing you need is an unexpected repair bill. A real estate home warranty from First American Home Warranty can help protect your budget when covered systems and appliances break down from normal wear and tear. It’s one of the most practical and straightforward steps a first-time home buyer can take. Instead of stressing over surprise expenses, you can focus on settling in and enjoying your new space.

Protect Your New Home from the Start

Avoiding common first-time home buyer mistakes starts with preparation. Taking a few smart steps now can give you peace of mind long after move-in day. A home warranty plan from First American offers added protection for your new investment. Wherever you are in the homebuying process, ask your real estate agent about adding home warranty coverage to your purchase.

Learn more about our comprehensive coverage and get a personalized quote today.

*Please review the sample contract for specific coverage, terms, and limitations.

The contents of this article are provided for general guidance only. First American Home Warranty does not assume any responsibility for losses or damages as a result of using this information.