We love our house but we made several big mistakes when we bought it. Today I’m sharing the 4 mistakes we made buying our first house so hopefully you can avoid these common first time home buyer mistakes and have a very smooth process!
Buying your first home can be a very nerve wracking process but it also can be one of the best financial moves of your life! I’m happy to be sharing my experience buying a house for the first time to help others!
These are the four mistakes we made during the home buying process as first time home buyers.
Did not save up 20% down.
One mistake we made buying our first house was not saving up 20% of the down payment. For our first home we only saved up 5% instead of doing a “full downpayment” of 20%.
While many financial gurus don’t yell at first time home buyers for saving up 20% on their first house, it is a great idea to aim for that larger down payment. It reduces the amount you owe overall, lowers your monthly payment, and prevents you from paying PMI each month.
If you go with less than 20% down you will have to pay PMI (private mortgage insurance) each month. This does nothing for you and only protects the lender so it’s something you want to avoid if you can.
Saving up a large down payment is difficult but there are multiple benefits: you will pay off the home faster, you’ll save money not paying PMI, you are actually more likely to get a mortgage, you’ll have smaller monthly payments, and you are a more competitive buyer too. There are very few downsides to saving up a full 20% down payment!
Did not have a full emergency fund.
One mistake we made was not having a fully funded emergency fund when we bought our first house. This was incredibly risky and we could have ended up in a huge amount of debt when something broke or an accident occurred.
When you buy a house it is guaranteed that something will break eventually. You need an emergency fund for when that situation arises to lower the risk face financially.
Some people drain their emergency funds to make the down payment on a home buy this can be the absolute biggest mistake you can make. It leaves you incredibly vulnerable and unable to handle the maintenance costs that come with owning a home each year.
Did not shop around for mortgage providers.
When we bought out first house we were too nervous about the process to shop around. Unfortunately this meant we went with the first mortgage provider our real estate agent recommended and they were ultimately not a good fit for us. Ultimately this was probably due to the fact that the first time I tried buying a house it didn’t work out. The fear that it wouldn’t work out made me play it so safe that we didn’t shop around.
Shopping around for mortgages is a great idea when you are buying your first house. Don’t let the process intimidate you. You can work with a mortgage broker or research mortgage options on your own to find the best rate and service. There are tons of online resources that make it incredibly easy to shop for and compare different mortgages.
Did not look at enough houses.
Ultimately in our search we did not look at enough houses. On our first day of searching for houses we looked at 5 houses and ended up buying one of those 5! While we love our house, we should have toured more houses in person to get a better idea of floor plans and different amenities homes offered.
The reason this was a mistake is because we got the typical “house buying fever” many first time home buyers get. It is easy to forget there are many more houses and there is no reason you can’t find another house you love if one doesn’t work out. Look at houses online and in person, go to open houses, get a good idea of what is out there in your market!
First Time Home Buying Mistakes
We love our house but we did make some mistakes! Luckily those mistakes educated me on what not to do so others won’t make the same mistakes – and we won’t make them again.
If you’re buying your first home check out some of my other posts about the home buying process! The more you can learn about buying a home the better you will do during the process.
Here are some of the more helpful and popular home buying series posts:
- How Much Money Should I Save Up For A House?
- Our House Price & Mortgage Details | Buying Our First Home
- Extra Expenses To Consider When Buying A House