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7 Big First-Time Buyer Mistakes to Avoid When Purchasing a Home in Texas

September 10, 2021 | By Reef Merhi

Table Of Contents

Updated January 17, 2022

Many first-time homebuyers are excited to finally buy their dream house, but it can be a daunting process. If you're looking for your first home in Texas, it's essential to understand the mortgage process and how mortgage companies work, your credit score, and who qualifies for FHA loans. Overlooking these things or making critical mistakes can delay your financing or closing. 

In this blog post, we'll discuss five mistakes first-time homebuyers should avoid when looking for their dream home in Texas.

Happy family after buying new house

1. Not Planning Your Budget 

Before you get too excited about the houses you see for sale online, have you mapped out your budget? Buying a house is different than looking for a new apartment or home to rent. Homebuyers deal with many different expenses along the way to homeownership, and it's important to plan that out in detail before looking at houses you can't afford. 

Your budget must include an accurate assessment of your current finances, including your debt-to-income ratio and the minimum credit score required to qualify for an FHA mortgage or other financing. If you're not sure about all of the costs that go into buying a house, work with mortgage companies in Texas to learn about different fees, closing costs, and other aspects of the home buying process that require payment before closing. 

When you are looking to buy a new house, there are many things you need to consider.

The most crucial factor is how much you can afford. You also need to think about your long-term plans for the house. Will you live in it for many years, or do you plan to sell it as soon as the market rebounds?

You should also consider the house's location and what kind of neighborhood it is in. It is vital to find a neighborhood that fits your lifestyle and personality.

2. Estimating the Wrong Down Payment Amount

Not putting enough down on a new house can leave you with high monthly mortgage payments or challenges finding the right financing options or FHA loans. However, it's no longer true (in most cases) that homebuyers need to put 20% down to qualify for some conventional loans. 

The right down payment amount tells sellers (and the seller's agent) that you're serious about buying the house. It also tells lenders that you're financially able to keep up with monthly mortgage payments and makes you more attractive to different mortgage options

It's essential to take the down payment amount seriously when planning your home-purchasing budget. The right amount can help you become someone who can qualify for an FHA loan or help your mortgage team find the best options for your first home purchase. 

3. Not Taking Advantage of First-Time Home Buyer Programs

Did you know that incentives exist for first-time homebuyers? In addition to an FHA home loan, these programs can help reduce your out-of-pocket costs or reduce the amount you need to borrow to get into your first home. However, if you're unsure what to look for or how to apply them during the financing approval process, you could miss out! 

To ensure you have access to every available incentive or down payment assistance, the best mortgage companies Texas offers can help you research your options and qualify for the best incentives. There's no reason to pay more for your first house than you need to! With the right information and guidance, it's possible to afford the house you've always wanted and enjoy a better home buying experience. 

4. Emptying Your Savings

We talked about planning your budget before getting too far into your home buying journey. However, emptying your savings into your first home should not be part of your budget! 

Saving for your down payment and your first home purchase is essential to get started on the right foot—but putting all of your savings into a house can be a detrimental financial decision. Without any cash reserves, you aren't prepared for the ongoing costs of homeownership. Suppose an emergency maintenance situation occurs after you move in, but you don't have the cash to fix it. In that case, you're at risk of going into debt to pay for costly repairs or delaying critical fixes until you rebuild some savings. 

Reevaluate how much home you can afford and how to save an appropriate amount—separate from your savings—to get into the ideal home for your budget. 

Cropped view of mortgage broker holding paper house and keys near wooden blocks isolated on white

5. Underestimating the Cost of Homeownership

Buying a home is only the first part of your homeownership journey! After closing on a new house and completing the financing through VA loans or a Texas FHA loan, you're in a long-term commitment with a significant asset that requires ongoing care to keep you and your family safe and happy. 

Make sure you estimate and plan for ownership costs, including:

  • The monthly mortgage payment
  • Utilities
  • Homeowners insurance
  • Preventive maintenance
  • Emergencies
  • Significant updates (like an eventual roof replacement)

Being prepared for these responsibilities is a smart way to experience success with purchasing your first home! 

6. Shopping For More Home than Your Budget Allows

When buying a home, it's essential to find the right balance between what you can afford and what you want. It's easy to get carried away looking at houses that are out of your budget, but unless you're prepared to pay for it all upfront, you'll likely end up with a mortgage that's too large. This can leave you with little money left over for things like entertainment, travel, emergencies, or home repairs.

When looking for a home, it is vital to estimate how much you can afford. Use an easy-to-use mortgage loan calculator to get a rough estimate of what you might expect to spend on a house. This will help you avoid wasting time looking at properties that could wind up overstretching your mortgage budget.

Before looking at houses, some homebuyers go one step further and get pre-approved for a mortgage. This is a clever strategy since these buyers narrow their search to properties that fit within their budget before they spend time shopping for a new home. Pre-qualifying for a mortgage might be a smart move for those new to the housing market.

7. Skipping Home Inspections

When buying your first home, the last thing you want is buyer's remorse. One of the easiest ways to avoid disappointment is to get a home inspection on the home you're interested in buying. This will help you know exactly what you're getting into before making a purchase.

When it comes to arranging an inspection, it may be tempting to skip this step. After all, it requires time, energy, and money. However, you may discover that the cost of an inspection is the best money you've ever spent.

Hiring a home inspector is a smart move. They can uncover issues like structural damage or electrical wiring problems. A home inspection could reveal several minor problems, as well as a few that are extremely costly to repair. It's also beneficial to attend the inspection in person if possible. While listening to the inspector and touring the premises, you'll get a lot of information about the property.

Ask your realtor to include a home inspection contingency as part of the sales agreement.

Work With One of the Best Mortgage Companies Texas Offers to Avoid Mistakes

The first-time homebuyer experience can be frustrating and stressful if you don't know what to expect. Many details are involved, from finding the right house to budgeting for your down payment and financing your mortgage loan! 

If you're not sure how to avoid the mistakes we've mentioned here or where to find help along the way, Texas United Mortgage is here for you! We work with individuals every day who need guidance on their homebuying journey to make it as smooth as possible. For more information about how we can help, reach out to us today!

What else should first-time buyers know (before closing on a home)? Find out in our free resource, the "First-Time Homebuyers Guide!"


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