There is a lot that you need to think about and consider before you lay down that down payment on a home. With those thoughts come certain responsibilities that many people tend to forget about. Here are some understandable yet potentially harmful first-time home buyer mistakes and how to avoid them.

5 First-Time Home Buyer Mistakes to Avoid

1.      Looking for a Home Before Applying for a Mortgage

When looking for a home, you need to make sure that you are actively applying for a mortgage. Chances are that you will look at houses that you cannot afford yet, which will harm your attitude about house hunting and other houses that are actually in your price range.

To Avoid: Get a preapproval letter. This will give you a better idea of what you will actually be able to afford. The pre-qualification process will make your bid on a home more competitive because you can show sellers that you have the funds to back up your offer.

2.      Making Too Small of a Down Payment

You might think that a small down payment is beneficial, but you will be much happier in the long run if you wait longer and have a bigger down payment. Although a 20% down payment is ideal, most banks will not go lower than 5%. There are programs that will let you buy a home with close to 3.5% down, but these can harm you later—just remember that a higher percentage is better. A bigger down payment means that you will have less to pay off and less to worry about.

To Avoid: Take the time to save more money—your down payment should help you get a payment that you are comfortable making each month.

3.      Stretching the Budget

Just because a bank or broker is willing to lend you a certain amount of money does not mean you actually have to spend that much on your home. It is incredibly easy to fall in love with homes that stretch your budget; however, overextending your budget will lead to regret and financial troubles in the future.

To Avoid: Instead of focusing on the monthly loan amount you qualify for, fixate on a monthly payment that you can actually afford. Do not forget to factor in all other elements that add to monthly payments, like food and utilities.

4.      Making a Large Purchase Before the Deal Closes

Before closing, first-time home buyers often make the mistake of making another large purchase. It is tempting to go furniture shopping or start looking into new cars—but do not do either. You should not buy anything that requires you to take out a loan. Every time you apply for a loan, a bank or lender runs your credit report. This is bad because it lowers your credit score, which can negatively affect your home-buying situation.

To Avoid: Save expensive shopping for later. If possible, it might even be better to avoid using your credit card in general.

5.      Only Talking to One Lender

You may think that the first lender you talk to is giving you the best deal, but how would you know if you do not look around some more? A lot of first-time home buyers will get a mortgage from the first—and only—lender or bank that they talk to. This can leave thousands of dollars on the table.

To Avoid: Talk to at least three different lenders to give yourself more of an idea of what is possible. Compare rates, loan terms, and lender fees—give yourself more time to figure out what will be best for you.

Denise Lockwood has an extensive background in traditional and non-traditional media. She has written for, the Milwaukee Business Journal, Milwaukee Magazine and the Kenosha News.