Skipping Pre-Approval
Some buyers start viewing homes before getting pre-approved, which can lead to falling in love with a property outside their real budget. Getting pre-approved first keeps your search focused and realistic.
Underestimating Closing Costs
Many first time buyers budget only for their down payment and forget about land transfer tax, legal fees, and other closing costs, leaving them short on cash at the finish line.
Making Big Purchases Before Closing
Buying a new car or furniture on credit before your mortgage closes can change your debt ratios and put your approval at risk. Lenders often recheck your credit close to closing day.
- Avoid new credit applications before closing
- Do not take on new loans or leases
- Keep spending steady until after closing
Waiving Conditions Without Understanding the Risk
In competitive situations, some buyers waive financing or inspection conditions without fully understanding what they are giving up. This can work out fine, but it should be a deliberate choice made with good advice, not a default reaction to market pressure.
Not Shopping Around for Financing
Sticking with the first lender or rate you see, without comparing options through a broker, can mean missing out on better terms elsewhere.
Frequently asked questions
- Why does making a big purchase before closing matter?
- It can change your debt ratios and put your mortgage approval at risk if your lender rechecks your file.
- Should first time buyers always waive conditions to compete?
- No, this should be a careful decision made with good advice, not a default strategy.
- What is the most overlooked cost for first time buyers?
- Closing costs like land transfer tax and legal fees are commonly underestimated.