When I was 22 years old, I bought my first home. There was a lot of pride in this moment for me. Until then, I repeatedly heard that homeownership was one of the smartest financial moves you could make.

The house was in a young neighborhood, and walkable to parks, restaurants, and a growing downtown area, making me feel like I was in college again. My new home was exactly what I needed — except I couldn’t afford it.

I quickly learned I set up a situation that made me despise homeownership instead of loving it. And it wasn’t just this one first-time home buyer mistake — there were a lot.

Here are five first-time home buyer mistakes I made that you can learn from.

Not Understanding Other Homeownership Costs

I was able to put 10% down on my first home purchase, which made me beam with pride. Saving up $20,000 on my $200,000 home felt like a huge accomplishment.

Unfortunately, that was nearly all of my savings. I didn’t realize the extent of the other homeownership costs, including but not limited to:

• Repairs
• Home maintenance
• Furniture
• Utility bills (heating, electric, water)
• Lawn equipment
• Dozens of other little things

Quickly, I became house-poor. A sizable amount of my income was either going to my mortgage or these other unexpected homeownership costs.

Additionally, a lot of my time was being spent dealing with homeownership issues. A leaky sink, a broken lawnmower, and a failing HVAC system were just a few of the worries I dealt with in my first year of homeownership.

Most of these problems were due to inexperience and human error, but nevertheless, I felt like the house owned me instead of the other way around.

Not Factoring In Private Mortgage Insurance

Unfortunately, my 10% down payment was not enough to avoid private mortgage insurance (PMI). This is a 1% fee that I had to pay to my lender for putting less than 20% down on my home purchase.

That 1% was just another unexpected drag on my income that I wasn’t expecting. My PMI cost $150 per month (or $1,800 per year) and I would much rather have it used for having fun with my friends.

Not Putting Enough Money Down

My first job out of college required a lot of travel — at times, for 10 days straight. My weekends would sometimes be on Tuesdays and Wednesdays. So, I wouldn’t be able to spend time with my friends. Then I’d be off traveling again.

After a year of this, I became burned out. I wanted another job that allowed me to work during the week and enjoy my weekends. Unfortunately, that would mean a $10,000 pay cut. Evidently, you can get paid a premium for working the weekends.

After thinking about it for a bit, I decided to go for it.

I didn’t analyze how this decision would affect my finances. This was when I felt the pinch of making only a 10% down payment. Monthly mortgage payments on top of PMI made my situation go from bad to worse.

Homeownership expenses took up more than half of my income at this time. I felt the crunch and quickly regretted my decision. This is when I started to take on debt through a home equity line of credit and eventually used my student loans to fund my lifestyle as well.

Not Preparing For A Financial Emergency

Eventually, I figured out that I needed to get some roommates. They would pay monthly rent, and have a nice place to live, and I wouldn’t feel so much financial pressure each month.

That worked out great. In the process, I even made some lifelong friends that I still hang out with today.

And then the Great Recession made its way to my neighborhood. All of a sudden, my home value plummeted. I owed $180,000 on the home, and it was now worth $100,000.

Because I now had no equity in my home, my bank said I could no longer use my HELOC. No equity, no HELOC.

Around the same time, my employer had to cut our pay for a period of time because our business wasn’t doing so well during the recession.

I was not financially prepared. My savings account did not have enough to cover one month of expenses. Having an emergency fund would have helped at the time. Most financial professionals recommend having a cash cushion of 3-6 months to help you through hard times.

Not Understanding How Refinancing Works

The next couple of years were financially tight. I took on more debt as I continued to spend more than I made each month.

My saving grace was when I got a big promotion at work. With the promotion, my salary doubled.

With this new financial fortune, I was determined to eliminate my debt and start living within my means.

And I did — with some help from my new wife. We combined our income and started to make some excellent progress to improve our collective net worth.

With home values rising, I thought it would be a good idea to get rid of my adjustable rate mortgage at 5.25% and lock in a 30-year fixed rate at 5%. This would have worked out, but two years later, my wife and I decided to move to a new neighborhood when she was pregnant with our second child.

When we refinanced our mortgage, we paid $2,500 in closing costs to the lender. And we did not save anywhere close to that amount with our refinancing.

In fact, since my original mortgage was an ARM, the rate actually adjusted down over the next three years. So, not only did we lose out on $2,500 in closing costs, but we paid $11,000 more in interest on our loan before we sold the home.

This was a $13,500 mistake.

Final Thoughts On First-Time Home Buyer Mistakes

As I look back on all of these stressful blunders I made, I’m not depressed by them. Actually, I’m thankful for them. Having lived through this financially difficult decade of homeownership, I vowed to never do it again.

Recently, my wife and I paid off the mortgage on our forever home. We now live debt-free, and mortgage-free, and we even crossed the millionaire mark in our 30s. These mistakes ended up being some of the best lessons I could have ever had.

What do you think about these first-time home buyer mistakes that I made? Are you considering your first home in the future or if you’re already a homeowner, what mistakes did you make?

Please let me know in the comments below.