Six common mistakes first-time homebuyers make

By: Lisa Coxon on June 13, 2025

This article has been updated from a previous version.

Buying your first home is one of the most exciting milestones of adulthood—but it can also be filled with potential pitfalls.

To help you avoid unnecessary stress and financial setbacks, steer clear of these six common mistakes many first-time buyers make: focusing only on the mortgage payment, shopping for homes without mortgage pre-approval, neglecting to build an emergency fund, accepting the first interest rate offered, skipping the home inspection, and overlooking your credit score.

Being aware of these pitfalls can help you make smarter, more informed decisions as you move toward homeownership. Here’s how.

1. Focusing only on the mortgage payment

Transitioning from being a renter to a homeowner can be tricky. You might look at what you’re currently paying in rent and find that you could afford a house worth X amount of money for a similar monthly payment. But this is often a trap.

Owning a house isn’t just about the monthly mortgage payment. There are a lot of other expenses that come with buying your first home, including property and land transfer tax, closing costs, inspection costs, and repair and maintenance costs.

To avoid becoming “house poor” (where your housing costs overextend your budget), take a comprehensive look at all expected expenses before committing to a price range.

2. Shopping for homes before mortgage pre-approval

This is one of the most common mistakes first-time home buyers make. It can be tempting to browse listings online and even book viewings before you’ve been to the bank. But this is of no use if you haven’t been approved for a mortgage yet.

It’s crucial to know what mortgage amount you’re pre-approved for before you start house hunting. Mortgage pre-approval locks in an interest rate for a specified period (typically 90-120 days) and shows sellers that you’re a serious buyer.

In today’s competitive housing market, this step can be the difference between securing your dream home or losing out to someone else.

3. Neglecting to build an emergency fund

Homeownership brings surprises, and not all of them are pleasant. Imagine moving in and discovering the water heater needs replacing or the furnace breaks down mid-winter. These unplanned expenses can derail your financial stability if you don’t have a safety net.

That’s why it’s recommended to have three to six months of living expenses saved in an emergency fund, separate from your down payment. This cushion helps you prepare for the unexpected while still maintaining your financial health.

4. Accepting the first interest rate offered

When you're pre-approved for a mortgage, you're also quoted a specific interest rate. But that doesn’t mean you should accept it without question. Taking the first offer could cost you thousands over the life of your loan.

Lenders often offer different rates based on their own criteria, so it pays to shop around. Use a free online mortgage rate comparison tool to explore multiple quotes and make sure you’re getting the lowest rate.

5. Skipping home inspection

Home inspections are a key step before closing on a house. A licensed inspector carefully examines the property’s roof, foundation, plumbing, electrical systems, and other major components to identify any red flags.

This process helps confirm that everything is in good working order—and can save you thousands by catching issues before you move in, rather than after.

The Canada Mortgage and Housing Corporation (CMHC) suggests including a home inspection as a condition of your offer. According to the CMHC, an inspection can cost around $500.

You can find a home inspector by doing some online research or asking your real estate agent for recommendations. Depending on the province you live in, you may also find a home inspectors association that can recommend an inspector.

Home inspections aren’t mandatory, but they are highly recommended. Don’t make the mistake of skipping this step, as it might cost you more later.

6. Ignoring your credit score

Your credit score plays a major role in whether you’re approved for a mortgage—and what interest rate you’ll get. That’s why it’s essential to check your credit report well before you start house hunting.

Old debts, missed payments, or accounts in poor standing can raise red flags for lenders and potentially derail your mortgage approval. Even a small issue from years ago can come back to haunt you at the worst possible time.

Get ahead of any surprises by reviewing your credit report early and addressing any problems. A little preparation now can save you a lot of stress—and money—later.

Remember, buying your first home is not just about finding the perfect property but also about setting a strong financial foundation for years to come.

Avoiding the common mistakes listed will position you for success and help you make confident, informed decisions.