Mortgage Research Network Podcast

Welcome to the Mortgage Research Network Podcast. Just a note that this podcast audio is AI-generated, but the article on which it's based was produced by people. Content is also reviewed for accuracy. And your hosts, Tim and Craig, are real people. Without further ado, let's get into today's topic.
Thanks for joining us once again on the podcast. I'm your host, Tim Lucas, editor of MortgageResearch.com and a former mortgage professional, and with me is Craig Berry, a mortgage originator with 25 years experience.
Glad to be in your earbuds today, everyone.
Today we're talking about first-time homebuyer mistakes. On the site, we run through no less than 19 of them, But we'll touch on the most important ones here.
Let's dive in.
Here's a sobering statistic. 82% of recent homebuyers regret their purchase, and nearly half of them are having a hard time keeping up with their mortgage payments.
Those numbers are absolutely staggering. What's really caught my attention is how the typical age of first-time buyers jumped to 38. that's a three-year increase in just one year.
You know what's fascinating about this whole situation? First-time buyers made up only 24% of all buyers in 2024, down from 32% the year before. It's like watching the housing market transform right before our eyes.
Hmm... speaking of transformations, I've noticed a lot of people are making this one crucial mistake. they're house hunting before they even talk to a mortgage lender.
Oh man, that reminds me of what this Seattle loan advisor said. she compared it to that intoxicating new car smell that makes all your financial sense just vanish. People get so excited about beautiful homes that they completely forget about their budget.
Well that brings up an interesting point about hidden costs. Like, everyone focuses on the down payment, but what about those sneaky closing costs that can run up to 5 or 6% of the loan amount?
EXACTLY! On a $500,000 house, we're talking about up to $25,000 just in closing costs. And then you've got this rule of thumb that you should set aside 1 to 2% of your home's value every year just for maintenance. That's another $5,000 to $10,000 annually that most first-time buyers don't even consider.
You know what really gets me? This persistent myth that you need a 20% down payment to buy a house.
Right. well, with the average home price around $504,000, that would mean needing over $100,000 saved up! But here's the thing: there are so many other options available. You can get into a home with as little as 3% down on some conventional loans, and certain government-backed loans like VA and USDA can get you in with zero down.
So what's your take on these first-time homebuyer assistance programs? I've heard there's a lot of available money out there in some cases.
Oh man, these programs are like hidden treasure that nobody talks about! You've got grants and forgivable loans that can help with both down payments and closing costs. But here's a smart strategy I've been hearing about, even if you have a bigger down payment saved up, maybe don't use all of it.
That's such an interesting approach. Like keeping some in reserve for emergencies?
Exactly! Let's say you've saved $25,000 for a $300,000 house. Instead of putting it all down, maybe just do 5% and keep that extra cash for emergencies. Because trust me, something WILL break in that first year of homeownership.
Speaking of things breaking, I've noticed more buyers are skipping home inspections to save a few hundred dollars.
Uh, that's like refusing to get an X-ray because the copay is too expensive! You're potentially missing major issues that could cost tens of thousands to fix. And a lot of new buyers overly focus on cosmetic issues instead of location and structural integrity. One thing you can't change about a house is its location.
Well that brings up another interesting trend. these recent changes in real estate commission policies. Buyers might now have to pay their agent's commission directly.
Yeah, we're talking about roughly 2.5% of the purchase price in most cases. But you know what? Having an agent is still crucial for first-time buyers to avoid even more costly mistakes. Another costly mistake is making big purchases. New buyers need to know that lenders check their credit right before closing. It's not just for the credit score. They're checking for new debt. That new couch purchased with a 12 month, zero-payment loan could cost them the house.
Patience is a virtue in this case. Wait until you're moved in to make any big purchases. Speaking of patience, people often feel pressured to rush into buying.
Moving too quickly is just as dangerous as waiting too long. And here's something that often gets overlooked. life after move-in. The number of little things you need is staggering, from lawn mowers to window coverings to basic tools. Plus, you've got higher utility bills, property taxes, and those inevitable maintenance issues.
So what's the key takeaway for someone thinking about buying their first home?
Look, buying your first home doesn't have to be perfect. it just needs to be right for your current situation and financial reality. The key is preparation and perspective. If you can avoid these common pitfalls we've discussed, you're already ahead of the game. Because at the end of the day, homeownership should be exciting, not overwhelming. It's all about making informed decisions that will set you up for long-term success, not becoming another statistic in that 82% who regret their purchase.
Well said, my friend.
Thanks. That's about all the time we have for this topic, but we go into even more detail on the site. To learn more, go to Mortgage research.com and type first time buyer mistakes in the search bar at the top of the homepage. We'll see you next time on the Mortgage Research Network Podcast.