Signs you’re ready to buy a home
There are plenty of tell-tale signs you’re ready to start your home buying journey. But we’re not talking about that gut feeling. Or the fact that your Pinterest board is full of interior design ideas. We mean the concrete, measurable facts about your life that signal you’re mentally (and financially) prepared for homeownership.
Your financial situation is stable
Hopefully, this doesn’t come as a surprise. But buying a home is a big investment. For many, it’s the biggest investment of a lifetime. So, what does “stable” look like when it comes to your finances? There are a few markers that you can check.
You’ve got a job
You’ve got a healthy credit score
You’ve got a low debt-to-income ratio (DTI)
Your credit score isn’t the only way banks measure your creditworthiness. Your debt-to-income ratio, or DTI, is just what it sounds like: all of your student, auto, and other monthly loan payments, credit card payments, and other debts weighed against your gross monthly income. A lower DTI looks less risky to lenders, meaning you’ll qualify for better terms and interest rates.
You’ve saved enough for a down payment
Your down payment plays a big role in how much house you can afford. You can think of it as a deposit, signaling to creditors that you’ve got what it takes to pay your mortgage. The goods news: the down payment gives you instant equity in your new home. But it can be a pretty hefty up-front expense.
Traditional wisdom dictates that you should save 20% of the total cost as your down payment. For a long time, that’s been how people gauge just how much house they can afford. But that 20% isn’t always realistic. In fact, according to SmartAsset, “most homebuyers make down payments of 6% or less. This is especially true for first-time homebuyers.” Of course, the more you can put down, the better. Higher down payments lower your monthly payment and set you up for success down the road.
You’re ready to put down roots
Signs it’s not quite the right time to buy a home
Your credit score is going to hold you back
You’ve got other big expenses in the next few years
You’ve only considered the sticker price
Breaking it down: to buy or not to buy
In summary, if you:
- Have a job you love and feel financially secure
- Have a down payment and six months of emergency funds saved
- Understand all of the costs that come with homeownership
- Are looking forward to maintenance and renovation projects
- Don’t have any other significant expenses planned
Then, congrats! It sounds like you’re ready.
But, if you:
- Can’t wait to switch careers, go back to school, or travel the world
- Are buried in credit card or student loan debt
- Would rather call a landlord about home repairs and maintenance
- Can get more house for your dollar while renting
Then you might want to wait it out until you feel more prepared.
Ready to get started?
Resident agents work with buyers at every price point. No, really. Every price point. Whether you’re looking for a new build to make your own or a piece of history in Downtown Phoenix, we’ll sift through thousands of houses for sale in Arizona. And you can trust us to hand-pick whatever’s most relevant to your search. Get in touch with a Resident agent to get started.