5 common mistakes first-time homebuyers make

Buying a home can be really stressful, especially if it's your first time. There's a lot to do, and it can feel like there's so much you don't know.

Even though it might seem overwhelming, it's important not to get scared away from the whole process. But you do need to be careful not to make some common mistakes that first-time buyers often fall into. If you know about these five potential mistakes and avoid them, you'll save yourself a lot of stress when buying your home.

1. Not understanding your down payment options

One big challenge for many first-time buyers is the down payment. If you've ever bought a car, you know a down payment is money you contribute to the total cost of the purchase.

• If you don’t have a certain amount to put down on your home loan, however, you might find yourself paying private mortgage insurance (PMI).

• The cost of PMI can be between 0.5 percent to 1 percent of the total loan amount, depending on your credit score, the bank, and other factors.

• Most banks want at least a 20 percent down payment before they won't make you pay for PMI.

• Fortunately, some government organizations and lenders want to encourage people to buy their first home. They offer free down payment grants or loans to those who qualify. Depending on your age, income, credit score, and other factors, you might be eligible for free money to help with your down payment.

2. Not finding out how much you can borrow before buying

When you're thinking about buying a home, the monthly costs can vary based on factors like your down payment, potential PMI, and other expenses. Those online calculators you see next to houses on websites like Zillow might not give you the most accurate picture of what you can actually afford.

To do this, you'll have to talk to a mortgage loan officer and provide various documents, such as your monthly pay stub and credit score. Although it might be a bit of a hassle, having that pre-approval letter is essential. It makes sellers take your offer more seriously when you're ready to make one. 

3. Not finding a good real estate agent

With all the online options for finding homes, you might think you can do it all by yourself. Finding a home seems like the hard part, right?

That's where a real estate agent comes in handy. They can make sure you see the newest listings right away. Plus, a good agent knows a lot about the area you want to move to. They can give you advice on things like getting homeowners' insurance and warn you about any problems you might face if you buy a home in that neighborhood. So, having a good agent is super helpful.

4. Not checking out the neighborhood at different times

• Is it still easy to get to work at 8 a.m. from this neighborhood?

• Where are the nearest grocery stores, parks, and public transportation?

• What's it like here during the night? If there are noisy trains, highways, or planes passing by, it's better to know before your first night in your new home. You don't want to be surprised by unpleasant sounds in the morning.

• At the very least, you can find out enough about the neighborhood to know how close or far you are from the bus line you need, and that way, you can focus your home search in the right area.

5. Not knowing what can be fixed and what's a big problem

You might hate the ceiling panels or think the bathtub is too small. But can those things be fixed, or should you forget about the house altogether?

These mistakes won't stop you from getting your own home, but they might slow things down and cost you money. If you can avoid them, you'll be moving into your dream home sooner than you think!