(Part 3 of The First-Time Homebuyer Series)
One of the most common reasons first-time buyers delay getting started has nothing to do with credit, income, or timing.
It’s assumptions.
Many buyers believe they need 20% down, perfect savings, and a large financial cushion before even exploring their options. By the time they realize that isn’t always true, they’ve often spent years feeling like homeownership was out of reach.
This mistake doesn’t come from poor planning. It comes from incomplete information.
Where the Confusion Comes From
For years, the idea of needing 20% down became the default advice. It’s well intentioned, but it doesn’t reflect how most first-time buyers actually purchase homes today.
The reality is that how much money you need depends on several factors:
- Loan type
- Purchase price
- Available programs or assistance
- Negotiated concessions
- Your personal comfort level
There isn’t one number that applies to everyone.
And understanding that early changes how buyers approach the process entirely.
The Three Buckets of Money
Instead of thinking about one large, intimidating amount, it helps to break the costs into three categories.
- Down Payment
This is the portion of the purchase price you contribute.
For many first-time buyers, this amount is lower than expected. Different loan options allow for different down payment levels, and the right choice depends on your overall financial picture — not just the percentage.
- Closing Costs
These are the costs associated with finalizing the transaction, such as lender fees, title work, and prepaid items.
Closing costs often surprise buyers simply because no one talks about them early enough. They’re normal, expected, and something that should be planned for rather than feared.
- Upfront Costs
These happen before closing and may include inspections, appraisal fees, and earnest money.
Again, these aren’t surprises when you understand them ahead of time. They’re simply part of the process.
The Fear of Draining Savings
Another concern many buyers carry is the fear of using all their savings to buy a home.
That’s a valid concern — and a good one.
Buying a home shouldn’t leave you feeling financially exposed. Smart planning includes making sure you still have a cushion after closing for normal life expenses, maintenance, and unexpected situations.
The goal isn’t just getting into the home. It’s feeling comfortable once you’re there.
Why Options Matter More Than Perfection
Loan options exist because buyers’ situations are different.
Some buyers benefit from conventional loans. Others may find FHA or VA loans to be a better fit depending on credit history, savings, or long-term plans.
There isn’t a universally “best” loan — only the one that fits your situation best.
You don’t need to become a mortgage expert. You just need enough understanding to ask good questions and make informed decisions alongside the right professionals.
Why This Mistake Keeps Buyers Stuck
When buyers assume they need more money than they actually do, they delay learning their real options.
And when learning is delayed, confidence is delayed too.
Replacing assumptions with clarity allows buyers to move forward intentionally instead of waiting indefinitely for a perfect scenario that may not be necessary.
Looking Ahead
Once buyers understand what they can comfortably afford and how much money they actually need, the next challenge usually appears during the search itself.
Because finding a home isn’t usually the hardest part — searching without a strategy is.
Coming next in the series:
Mistake #4: Searching for Homes Without a Strategy
How to avoid burnout, comparison fatigue, and decision overwhelm during the home search.
Check out Part 4 in this series
