3 Big Mistakes I Made When Buying My First House

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  • When I bought my first house, I made some decisions that weren't very smart.
  • I didn't think about whether the house would work for our family over the long run.
  • I also made a small down payment which cost me money. 

Are you in danger of making the same mistakes I made? 

When I bought my first home, I wasn't very skilled in financial matters and I was simply eager to purchase a property as soon as I could. I was excited about the house, but unfortunately I didn't make the best decisions when it came to buying it. 

In fact, I made three big mistakes that ended up costing me unnecessary money and stress. Here's what they were. 

1. Not thinking long term 

When I purchased the property, it worked well for my lifestyle at the time. It provided a nice water view, it was close to a bunch of restaurants, and it was fairly close to the beach. Those features had me envisioning a fun lifestyle that would leave me feeling like I was on vacation all the time. 

Because of that, I ignored the fact that the house was really too small for a growing family, or even for my current extended family to visit. I also didn't think too much about the fact that the house was older and would soon need a new roof, a new air conditioner, and other costly repairs. 

Since I didn't think about the big picture and whether the home would work for me over the long term, I ended up needing to move within a pretty short time after purchasing the home. I got lucky and was able to sell for a bit of a profit, but I just as easily could have lost money due to the high transaction costs and the short period of ownership. 

2. Not shopping around for a mortgage 

One of my biggest mistakes that I made was that I didn't do my due diligence and get quotes from multiple mortgage lenders. In fact, I only ended up getting a single quote from the mortgage company my real estate agent had suggested working with. 

Since I didn't compare rates, I'm quite sure I most likely ended up with a higher cost loan than I probably would have been eligible for. This made my monthly payments more expensive and my loan cost more than it should have. I could have avoided this by just getting some online quotes, which would have taken only a few minutes and enabled me to make sure the lender I chose really earned my business. 

3. Making a small down payment

Finally, my last error was putting just 10% down on the property instead of waiting until I had more to put down. A small down payment ended up making my mortgage more expensive since I had to pay for insurance to protect the lender. I was also at risk of owing more money than I could sell my home for, but fortunately I got lucky and that didn't happen.

Once I started to learn more about financial issues, I realized that these big mistakes had put me at significant risk of overspending on my house and perhaps not being able to sell it if I needed to. Since that time, I've made sure to do my research before entering into any big financial transactions so I don't make potentially dangerous and costly errors again.

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