The 5 Biggest Mistakes First-Time Home Buyers Make

If you’re getting ready to buy a home, chances are you’ve already Googled “mortgage rates” or “best mortgage lenders near me.” That’s where most people start. But here’s the truth: shopping for a mortgage is more complex than simply chasing the lowest advertised rate. There are several common missteps that first-time home buyers make—mistakes that can cost thousands of dollars over the life of a loan or lead to frustration during closing.

Here’s what lenders don’t always tell you—and what you should be looking out for before choosing who to trust with your financing.

1. Getting Too Hung Up on Interest Rates

Everyone wants the lowest rate, but focusing solely on that number is one of the most expensive mistakes buyers make. Online rate quotes don’t reflect your actual profile—they’re based on assumptions: perfect credit, 20% down, no debt, and a specific loan amount. Most buyers don’t match that profile.

Worse, some lenders advertise low rates to get your attention, then add fees, points, or restrictive terms that cancel out the savings. Always ask:

• Is this the “par” rate (the lowest rate that doesn’t cost anything), or are points being charged?
• What’s the total cost of the loan over thirty years?
• Is this an estimate or a quote based on my actual credit and finances?
• What is my monthly payment?

Low rates look good on paper—but without context, they can be misleading. A trustworthy lender will show you the rate and the cost tied to it, including any credit or points involved. If you want to get a sense of how the numbers might play out, our mortgage calculator is a great place to start—just remember, your actual rate will depend on your full financial picture. You can check it out here: MBA Mortgage Calculator

2. Not Getting Pre-Qualified Before Home Shopping

Many first-time home buyers wait until they find the right home before getting serious about their mortgage. Then they get hung up on finding the lowest interest rate, and the highest pre-qualification amount. That’s a mistake. Without a pre-qualification, you don’t really know what you can afford. Sellers won’t take your offer seriously and if you do have an offer accepted, you could be committing yourself to buying more house than you can comfortably afford.

Pre-qualification gives you:

• A verified purchase budget
• Insight into what your monthly payments will look like
• A stronger negotiating position with sellers
• A head start on the underwriting process (where delays can otherwise derail a deal)

Pre-qualification isn’t just paperwork—it’s your foundation. It helps you move confidently and avoid wasting time looking at homes that aren’t financially realistic.

3. Overlooking First-Time Buyer Programs

If you’re buying your first home—or haven’t owned one in the past few years—you may qualify for programs unique to first-time home buyers that offer better terms than traditional loans. These programs can offer:

• Down payment assistance
• Lower interest rates
• Flexible credit requirements

FHA loans, for example, only require 3.5% down and are more lenient with credit scores. However, not every buyer will benefit from FHA—there may be other first-time buyer programs that have better terms for your unique situation. Sometimes those programs may have a higher rate, but other terms that result in a lower monthly payment. The key is working with a loan officer who takes the time to explain each one and compare them for your situation.

What buyers often miss is that not all lenders offer or prioritize these programs, especially if they’re focused on volume, not service. Ask your lender early: Do you work with any first-time homebuyer programs?

4. Ignoring the True Cost of the Loan

Here’s where things can get expensive—fast. Your mortgage rate is only one part of the equation. Many lenders charge fees and points that drive up the total cost. Others might offer you a credit toward closing costs in exchange for a higher rate. Understanding the full picture matters.

Key questions to ask:

• What are the total closing costs?
• Are there any origination fees, underwriting fees, or broker fees?
• Does this loan have a prepayment penalty?
• Are there rate adjustment periods or balloon payments?

Don’t just compare rates—compare Loan Estimates side by side. Look at the closing costs, any points being charged, and the projected monthly payment, and always ask for an explanation of anything you don’t understand. A good loan officer will walk you through it without pressure.

5. Choosing the Wrong Broker (Or One Who Doesn’t Communicate)

This might be the most painful mistake of all. The wrong broker can cost you time, money, and—worst case—your dream home. Missed deadlines, vague communication, and lack of clarity about requirements are red flags.

When comparing brokers, don’t just ask about rates—ask about service:

• Will I have one point of contact or a team?
• How do you communicate during the loan process?
• What happens if something changes with my finances or credit?
• Can you provide a timeline of the loan process?

A strong mortgage professional won’t just quote a rate and disappear. They’ll explain the process, answer questions clearly, and give you confidence at every stage. In a fast-paced market, communication and responsiveness are just as important as rates and fees.

Bonus: Understand the Role of Points (and How They Affect Your Loan)

When you receive a rate quote, it may come with points—additional costs you pay upfront to “buy down” the rate. One point is equal to 1% of the loan amount. You can also receive a lender credit (money back to you to help with costs) by taking a slightly higher rate.

It’s important to weigh short-term vs. long-term savings:

• Buying points may make sense if you plan to stay in the home long enough to break even on the upfront cost.
• Taking a credit may lower closing costs but increase your monthly payment.

The right loan officer will model both options for you side by side so you can make the best financial decision based on your timeline and goals.

Final Thought: Choose Guidance Over Guesswork

There’s a lot of noise out there—rate ads, clickbait calculators, big banks offering fast pre-quals with no context. But buying a home is too important to leave to chance. A strong mortgage strategy starts with someone you trust—someone who takes time to explain, compares your options in detail, and walks with you through every step.

At MBA Mortgage, we do exactly that. We work with first-time home buyers every day to break down loan programs, explain the numbers in plain language, and help you choose financing that fits your real-life budget and long-term goals. If you’re preparing to buy a home, we’re ready to guide you with experience and transparency.

Start your application online [here] or call us at 781-849-1118 to schedule a quick consultation.