Buying a new home can be one of the most exciting things you’ll ever do. On the other hand, it might turn out to be one of the most overwhelming things you’ll ever do, too! Between finding a mortgage lender, budgeting for a down payment and closing costs, touring multiple homes, and moving out of your old home, there are a lot of logistics to work through before closing on a new home. 

If you’ve bought a home before, you may already be a pro at making sure you cover all your home-buying bases. If this is your first time, the excitement and stress can make it easy to miss some crucial blindspots, and you might end up making some costly mistakes that could be avoided with a little extra research. Never fear: we have tips to help you avoid making some of the common errors that many first-time homebuyers make.

1. Not Researching the Neighborhood

At first look, the home you’ve found could seem absolutely perfect: it has the right amount of bedrooms and bathrooms, it has the porch you’ve always wanted, and the yard is huge! But, what about your neighbors? You won’t just be spending time inside your home, after all. What is the neighborhood like? What’s the crime rate? Does it have all of the things you want or expect in your community? 

Because this will hopefully be your home for a long time, you should feel safe and even excited about where your house is located. More importantly, you should feel comfortable in your own home. Another important thing to consider is how long your commute would be and what the schools in the area are like if you already have or are planning on having children in the future. 

2. Applying for a New Credit Card Before the Sale Has Closed

When you apply for a new credit card or a loan, or even when you buy a new car, there will be a hard pull on your credit report. Your mortgage lender will have to do a credit check before providing the mortgage loan, and new lines of credit or credit inquiries lower your credit score temporarily. This could easily impact the mortgage total and rates that you’re offered, which might mean you’re no longer able to afford the home you had your heart set on. Even closing old lines of credit can negatively impact your credit, so it’s best to wait until after closing to make any sudden financial changes. 

3. Not Budgeting for Utilities 

It’s easy to forget about utilities. Whether they’re billed monthly or quarterly, they can sneak up on you when you think you’ve finally paid off all your bills and can relax. When you’ve found a mortgage lender, you’ve explored the rates, and you’ve decided on a down payment that allows you to afford your monthly mortgage, don’t forget to factor in the heat, gas, electric, water, and other services that you’ll be paying for. This amount can end up being several hundred dollars a month, and you may find yourself with a tighter budget than you’re comfortable with. 

4. Not Taking Advantage of Home Inspections

Home inspections can reveal all sorts of issues that you didn’t anticipate–– and they often do! If your budget only covers what your monthly mortgage payments will be, you’ll find yourself in a bit of trouble if you find that your roof needs to be replaced or if there’s mold to deal with. Make sure you have a home inspection done before closing and that you factor their finds into your final decision.

5. Talking to Only One Mortgage Lender

It’s important to explore your options and not to settle on the very first mortgage lender that you talk to. Shop around for the best deals until you find the one that works best for you. Different lenders and brokers may offer very different interest rates and mortgage amounts, so don’t be surprised if you come across a few that really don’t work for you.

A mortgage broker can also be a huge source of professional advice for you, so make sure you get along with and trust the lender that you choose!

6. Buying More House Than You Can Afford

It’s tempting to get the big house with the pool that technically fits inside your budget. But if after closing costs, utilities, repairs, and other lifestyle costs, you’d be scraping by just to make your mortgage payments, you really can’t afford it. The house you can truly afford will leave you with all the money you need to pay your bills with some left over. Paying your mortgage shouldn’t be a source of extreme stress that you dread having to make work!

Buying a home, especially your first, should feel exciting! Having a house offers you stability, comfort, and financial benefits. Watching your family grow, hosting holidays, and celebrating with loved ones under the roof you own are some of the most special moments you can experience. Although some of the stress that comes with the home-buying process is unavoidable, we hope these tips help you avoid some of the most common pitfalls that first-time home buyers make. Happy hunting!