Heather Daley
VanDyk Mortgage Albuquerque NM

Common First-Time Homebuyer Mistakes (& How to Avoid Them)

Buying your first home is exciting, but it can also feel overwhelming, especially in today’s fast-moving housing market. Whether you’re dreaming of a cozy starter home or a long-term family haven, it’s important to go into the process of feeling prepared and confident.

To help, we’ve outlined five common mistakes that many first-time homebuyers make, and how you can avoid them. With the right strategy, your home-buying journey can be smooth, stress-free, and even enjoyable!

Mistake #1: Looking for a Home Before Getting Preapproved

It’s easy to get caught up in scrolling through listings and touring homes, but in a competitive market, sellers expect buyers to be preapproved before they make an offer. Without preapproval, you risk losing out on a home you love to another buyer who’s already financially prepared.

How to avoid it:

• Get a fully underwritten preapproval before you start house hunting. This shows sellers that your offer is serious.
• With with a lender who thoroughly reviews your credit, income, and assets upfront so you know exactly what you can afford.

Taking this step early will give you peace of mind and help you make an offer with confidence.

Mistake #2: Buying a Home Over Your Budget

We get it, it’s easy to fall in love with a home that stretches your budget. But overextending yourself financially can lead to stressful monthly payments and make it harder to handle unexpected expenses like home repairs or medical bills.

How to avoid it:

• Focus on what you can comfortably afford each month, not just the maximum loan amount you qualify for.
• Consider potential future costs like property taxes, maintenance, and insurance to make sure your budget stays realistic.

Your new home should enhance your life, not add financial pressure. Finding the right balance is key.

Mistake #3: Making Changes to Your Credit Before Closing

Many homebuyers don’t realize that lenders check their credit again right before closing. If you take out a new loan, finance a big purchase (like a car or furniture), or close an old credit account, it can impact your loan approval or even change your mortgage terms.

How to avoid it:

• Avoid applying for new credit cards, taking out loans, or making big purchases until you’ve closed on your home.
• If possible, focus on paying down the existing credit balance to keep your credit score strong.

It might be tempting to start buying furniture for your new home, but hold off until the keys are officially in your hand!

Mistake #4: Holding Out for the ‘Perfect’ Home

It’s completely normal to have a vision of your dream home, but waiting for a house that checks every single box can mean missing out on great opportunities. The reality is, no home is perfect, but many can be perfect for you with a little flexibility.

How to avoid it:

• Decide ahead of time which features are must-haves, and which are nice-to-haves.
• Be open to homes that might need minor updates, some loan programs even allow you to finance renovations into your mortgage.

Sometimes, a little creativity and sweat equity can turn a great house into the home of your dreams!

Mistake #5: Not Exploring All Mortgage Loan Options

Many first-time buyers think they need a huge down payment to buy a home, but that’s not always true! There are several loan programs designed to help first-time buyers with flexible credit requirements, lower down payments, and even down payment assistance.

Here are three popular loan options to consider:

FHA Loan – Great for Buyers with Lower Credit Scores

Pros:

• 3.5% down payment required
• Easier credit & income qualifications
• Allows up to 6% seller credits to help with closing costs
• Gift funds can be used for the down payment

Cons:

• Requires monthly mortgage insurance
• Mortgage insurance is permanent for the life of the loan

VA Loan – Best for Military & Veterans

Pros:

• Zero down payment required
• No monthly mortgage insurance
• Lower monthly payments

Cons:

• Only available to eligible veterans or active-duty military
• Has an upfront funding fee (can be rolled into the loan

USDA Loan – Ideal for Rural & Suburban Homebuyers

Pros:

• No down payment required
• Flexible credit & qualifying guidelines
• Can finance repairs & closing costs into the loan

Cons:

• Geographic restrictions – must be in an eligible rural/suburban area
• Income limits apply
• For owner-occupied single-family homes only (no investment properties)

Final Thoughts

Buying a home is a big life milestone, and with the right preparation, it can be a smooth and exciting journey. The key is to:

• Get preapproved early
• Set a realistic budget
• Keep your credit stable
• Stay open-minded about home options
• Explore loan programs that can help you save

When you’re ready to take the next step, our team at VanDyk Mortgage is here to help! Reach out today to start your homebuying journey with confidence.