By Michael Cordero, Broker at Ember Realty
Trusted Real Estate Advisor for Central Florida Buyers
Buying a home is one of the most rewarding milestones in life, but it is also one of the most expensive. It’s not just the price tag that matters. There are long-term financial consequences to every choice you make during the buying process.
As a local broker in Central Florida, I’ve seen it all: buyers who overextend their budgets, skip inspections, or lock into unfavorable mortgage terms. These mistakes can cost thousands of dollars and turn what should be a dream home into a stressful money pit.
Whether you’re buying your first home, upgrading, or relocating, this guide will explain seven common home—buying mistakes and exactly how to avoid them.
Let’s dive in.
Mistake #1: Underestimating the True Cost of Homeownership
What to Budget For:
- Annual maintenance and repairs (1–2% of the home’s value)
- Property taxes and homeowners’ insurance
- HOA fees (if applicable)
- Pest control, lawn care, and tree trimming
- Replacement of big-ticket items (roof, HVAC, plumbing, etc.)
Example: For a $300,000 home, plan on spending $3,000–$6,000 per year just on upkeep.
Pro tip:
Before you buy, get a home inspection and request a seller disclosure form. Then, list potential upgrades or repairs needed within the next 3–5 years. Create a savings plan for those expenses now, not later.
Mistake #2: Spending Too Much and Becoming “House Poor”
We all want a beautiful home, but it shouldn’t come at the cost of financial stability. Spending too much on your monthly mortgage can leave little for savings, travel, or even groceries.
Rule of Thumb:
Keep your total housing costs (mortgage, taxes, insurance, HOA fees) under 28% of your gross monthly income.
Let’s Break That Down:
If you make $80,000/year, aim to spend no more than $1,867/month on housing.
🛑 Common trap: Online listings often show only the base mortgage estimate, without including taxes, insurance, or fees. Use a complete mortgage calculator (we recommend this one).
🔎 Do this:
Get pre-approved for a mortgage—not just prequalified—and work with a local agent who understands your financial goals, not just your wishlist.
Mistake #3: Failing to Shop for the Best Mortgage
Most home buyers don’t realize they have options when it comes to financing. Accepting the first mortgage offer you receive could cost you tens of thousands over the life of your loan.
Mortgage Rates Can Vary Based On:
- Credit score
- Down payment amount
- Loan type (conventional, FHA, VA)
- Lender type (bank, credit union, mortgage broker)
📉 A 0.5% difference in your interest rate could mean $80–$120/month in savings, over $40,000 on a 30-year mortgage.
🔎 Do this:
- Get quotes from at least three lenders
- Ask about discount points and closing cost structures
- Compare the APR, not just the interest rate
- Inquire about local down payment assistance programs in Florida
✅ Pro Tip: Some lenders offer better terms for teachers, first responders, and veterans. Ask if you qualify.
Mistake #4: Ignoring the True Cost of Loan Fees
You might see a low advertised interest rate, but be careful. Some lenders charge high fees upfront that get rolled into your loan. That means you’re paying interest on fees for 15–30 years.
Common Loan Fees Include:
- Origination fees
- Processing fees
- Underwriting fees
- Application fees
- Title insurance
💡 A 6.5% loan with low fees may be cheaper long-term than a 6.2% loan with $5,000 hidden charges.
🔎 Do this:
Look at the Annual Percentage Rate (APR) to see the actual cost. Ask for a Loan Estimate (LE) form from each lender. Compare fees line-by-line
Mistake #5: Making a Minimal Down Payment
It’s tempting to put as little down as possible. But going below 20% usually means you’ll pay Private Mortgage Insurance (PMI)—an extra monthly cost that protects the lender, not you.
PMI Costs:
- Usually 0.5% to 1.5% of the loan amount annually
- On a $300,000 loan, that could be $125–$375/month
🧮 That’s $4,500–$13,500 over five years—money you’ll never get back.
🔎 Do this:
- Aim for a 20% down payment to eliminate PMI
- Consider homes in lower price ranges where 20% is more doable
- If you must pay PMI, create a strategy to boost equity and request removal as soon as you hit 20%
💬 Ask your lender: “When can I request PMI removal, and how will you determine property value at that time?”
Mistake #6: Not Reviewing Your Credit Report Before Applying
Your credit score doesn’t just determine whether you qualify—it affects your interest rate, loan options, and down payment requirements.
What Hurts Your Score:
- High credit card balances
- Late payments
- Errors or outdated info
- Closing old accounts right before applying
🔍 Check all three reports (Equifax, Experian, TransUnion) at AnnualCreditReport.com
🧹 Dispute inaccuracies and avoid new credit activity while shopping for a home.
🔎 Do this:
Start reviewing and improving your credit 3–6 months before applying. Even a 20-point score bump can open better loan options and reduce your rate.
Mistake #7: Buying Before You’re Financially Ready
The pressure to “buy now” can be intense, especially in competitive markets like Orlando, Winter Park, or Kissimmee. But buying a home before you’re truly prepared can backfire.
Signs You Should Wait:
- You haven’t saved enough for a down payment or closing costs
- You don’t have an emergency fund
- You’re unsure about job security
- Your credit score needs work
💡 Reality check: Just because you can qualify for a loan doesn’t mean you should take it right now.
🔎 Do this:
If needed, rent for a year while you save, budget, and prepare. Use that time to explore neighborhoods and understand the market. When the right home comes along, you’ll be ready and confident.
Bonus Tip: Work With a Local Real Estate Expert
One of the smartest moves you can make is hiring a real estate agent who knows your area, understands the market, and advocates for you, not just the deal.
At Ember Realty, we’re here to help you confidently navigate these changes. Whether you’re looking to buy, sell, or explore your options, our experienced team is ready to assist you. Contact us today!
🔑 Ready to Buy Smarter? Let’s Talk.
Buying a home should be exciting, not overwhelming or financially draining.
Whether you’re just starting to explore or ready to make an offer, Ember Realty is here to guide you every step of the way.
