Buying a first home is a major milestone for many Vietnamese families in the US. But because the industry English is difficult, and because of financial habits carried over from back home, many families make avoidable mistakes. Below are the most common ones I see, along with how to avoid them.
1. Thinking you must pay all cash or put a lot down
Many people believe they must save a full 20% or even buy outright in cash before they can own a home. In reality there are many low-down-payment programs: FHA often needs only about 3.5%, and some conventional loans for first-time buyers need just 3%. Waiting to save a full 20% can cost you years while home prices rise.
2. Not checking and building credit first
Paying cash for everything sounds wise, but it leaves you without a credit history for a lender to evaluate. Use a credit card with discipline and pay on time to build your score at least 6 to 12 months before buying.
3. Reporting income too low to pay less tax
For the self-employed, reporting low net income lowers your taxes but also lowers your borrowing power. If you plan to buy in the next one to two years, discuss it with your tax preparer and loan officer together to strike a balance.
4. Buying a new car right before buying a home
A monthly car payment raises your DTI and can cut your home borrowing power by tens of thousands of dollars. Delay the car purchase until after you close on the home.
5. Ignoring the hidden costs of ownership
Many families only count the monthly loan payment and forget: property taxes, insurance, HOA fees, repair costs, and reserves. A home needs a steady maintenance budget. Calculate the total cost of ownership, not just the loan.
6. Not getting pre-approved early
Touring homes without a pre-approval letter wastes time, because you do not know your price range and sellers will not take your offer seriously. Get pre-approved before you start looking.
7. Making large transfers or changing jobs mid-application
After you apply, the lender re-checks your finances right before closing. Do not make large transfers with unclear sources, do not open new cards, and avoid changing jobs if possible until it is done.
8. Being afraid to ask because of the language barrier
This may be the quietest but most damaging mistake. Many families sign documents without fully understanding them, or hesitate to ask again. You have the right to have everything explained in a language you understand. Working with someone who can explain clearly in Vietnamese helps you avoid costly wrong decisions.
9. Not comparing or understanding closing costs
Beyond the down payment, there are closing costs, usually about 2% to 5% of the home price: appraisal fees, title insurance, and processing fees. Ask for the Loan Estimate and review every line carefully.
If you are preparing to buy your first home and want to avoid these mistakes, reach out to William for a free consultation in Vietnamese. He can walk with you step by step and explain every number clearly, so your first home purchase stands on solid ground.