Homeownership is a goal that many people eagerly anticipate. In a recent study by LendingTree, 94% of participants associated homeownership with their understanding of the American Dream, while 84% expressed a personal aspiration to own a home in the future. 
 Real estate trends back up this sentiment, revealing that there were 2.1 million more owner-occupied homes in 2020 compared to the previous year—the most significant net increase since 2003-2004.

Transitioning from renting to owning a home can feel like a significant challenge. Saving for a down payment often feels overwhelming, and the multitude of small details involved in navigating the property market can make the home buying process increasingly daunting. Many first-time buyers stumble into mistakes while exploring the marketplace and managing the financial aspects of purchasing a home. While some of these mistakes may lead to minor inconveniences later on, others can have long-lasting negative impacts on financial health. Fortunately, avoiding these pitfalls is relatively easy if you know what to watch for. From the emotional journey of purchasing a home to the necessary financial calculations, here are some common mistakes that first-time buyers should be aware of as they prepare to close on their new home.

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Spending more than you can afford

The first — and perhaps gravest — mistake that any new homebuyer can make is spending too much on their home. The vast majority (around 70%) of homes purchased in 2021 used mortgage funding to close the deal. While the pandemic saw a change in market behaviour, including an increase in cash purchases, mortgages remain the backbone of the homebuying experience. The result is a repayment schedule that will act roughly similar to the monthly rent payment that first-time buyers will indeed be acquainted with.