Five Costly First-Time Buyer Mistakes

Most first-time buyer mistakes are not dramatic. They are small oversights that cost a few thousand dollars each, and they are almost entirely avoidable with a conversation before you start.

1. Shopping before getting pre-approved

Falling for a house you cannot finance is a bad afternoon. Worse is writing an offer, having the financing condition fail, and losing the property — or your deposit. A real pre-approval sets your ceiling and holds a rate while you look. Do it first.

2. Forgetting closing costs

The down payment is not the only cash you need. Budget for:

• Legal fees and disbursements — roughly $1,200 to $2,000.
• Title insurance — a few hundred dollars.
• The provincial sales tax on your default insurance premium if you are under 20% down — 6% of the premium, due in cash, in Saskatchewan.
• Property tax and utility adjustments — reimbursing the seller for amounts they prepaid.
• A home inspection — $400 to $600.

Set aside 1.5% to 2% of the purchase price for closing costs and you will not be caught short.

3. Making a big purchase during the process

A new car, financed furniture, or a fresh credit card between pre-approval and closing can change your debt-service ratios enough to break the approval. Lenders often pull credit again just before funding. Buy nothing on credit until you have the keys.

4. Skipping the home inspection to win a bidding war

An inspection can reveal a failing furnace, a compromised roof, or foundation movement — five-figure problems. Waiving it to make your offer more attractive is a gamble with the downside on you. If the market forces it, at least get a pre-offer inspection.

5. Taking the first mortgage offered

Your bank's branch rate is a starting point, not the market. Rate, penalty structure, prepayment privileges, and portability all vary between lenders, and the differences add up over five years. A broker shops all of them at once at no cost to you.

None of these are hard to avoid. They just require someone in your corner who has seen them go wrong before. That is most of what I do.