4 First Time Home Buyer Mistakes We Made

We love our house but we made several big mistakes when we bought it. As first time home buyers we thought we were prepared but we unfortunately still made several mistakes.

Today I’m sharing those 4 mistakes we made buying our first house so that you can avoid these common first time home buyer mistakes. Hopefully our home buying mistakes will lead you to have a very smooth experience!

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!

Home ownership catapults many to financial security and can set up lasting wealth for generations. Buying a home is one of the biggest and most lasting financial decisions you’ll make. It’s best to avoid mistakes!

Our Home Buying Mistakes

I’m happy to be sharing my experience buying a house for the first time to help others, both good and bad! 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 not saving up 20% on their first house, it is a great idea to aim for that larger down payment. If you can save up 20% or more for a downpayment then you should do so. 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 can be difficult when you don’t have a lot of extra income, but there are multiple benefits to increasing your down payment: 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 when buying our first house was not having a fully funded emergency fund in case something happened. This was incredibly risky and we could have ended up in a huge amount of debt when something broke or an accident occurred. We took a gamble that I wouldn’t recommend – it could have ended very poorly.

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. We luckily avoided anything major early on but not everyone is that lucky.

Some people drain their emergency funds to make the down payment on a home but this can be the absolute biggest mistake you can make. It leaves you incredibly vulnerable to emergencies and also 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 for mortgages once we were pre-approved with one company. This was a huge mistake. We could have found a much better provider and deal with our loan.

Unfortunately not shopping around meant we went with the first mortgage provider our real estate agent recommended and they were not the best 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 again made me play it so safe that we didn’t shop around which was a mistake.

Shopping around for mortgages is a great idea when you are buying your first house because it allows you to get the best mortgage loan and rate. now that I’m past that initial fear I realize how important it is to shop around!

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.

One mistake we made in our home buying search was not looking 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. We saw a home we loved and we knew the hot market meant many homes were snatched up so we went with that first house very quickly!

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 during the process!

Luckily those mistakes educated me on what not to do when buying a hosue 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:

Remember also that a house can be a wonderful addition to your life but it’s not the end all be all. Homes are sold every day, people move all the time, accidents occur, and plans change. Your first home will likely not be your last home. Try to keep this in mind and be smart about buying your first house!

Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.

Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.

Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.