Thinking About Buying a Home? Here's How to Tell If You're Ready

Buying a home is a major life milestone and one of the biggest financial and emotional decisions you'll ever make. But don't let that intimidate you! Real estate is also one of the most secure investments you can make, with the potential to build significant wealth over time. As long as you're in a solid position to buy—meaning you have stable income, manageable debt, and savings for a down payment—homeownership can be an incredibly rewarding step. If you're wondering whether now is the right time for you, here are some signs that you're ready.

You have a steady income

One of the biggest factors in determining if you're ready to buy a home is your income stability. If you've had a steady job for at least two years and can comfortably cover your rent and other expenses, that's a great sign. Lenders will look at your employment history and income to make sure you can handle monthly payments - so if you have a reliable paycheck, you're off to a good start. 

You have enough savings to cover upfront costs

To buy a home, you'll need enough savings for a down payment, closing costs, and initial expenses like a home inspection and appraisal. Many first-time home buyers can qualify for loan programs that require as little as 3% down, meaning a $300,000 home would require a $9,000 down payment. 

Closing costs typically range from 2-5% of the home's price, covering expenses like loan and attorney fees. However, a skilled agent can negotiate to have the seller cover some or all of your closing costs, reducing your out-of-pocket expenses. Having extra savings for moving costs, initial home repairs, and an emergency fund can also help you transition smoothly into homeownership.

Your Monthly Budget Can Handle Homeownership

Owning a home means more than just paying a mortgage—you’ll also need to budget for things like property taxes, homeowners insurance, utilities, and maintenance.

A good rule of thumb? Your total housing costs (mortgage + taxes + insurance) should be no more than 28-30% of your gross monthly income. If you’ve done the math and feel comfortable with the numbers, that’s a strong indicator you’re ready to buy.

Your Debt is Under Control

Before approving you for a loan, lenders look at your debt-to-income (DTI) ratio—which is the percentage of your income that goes toward debt payments like student loans, car payments, and credit cards.

Most lenders prefer a DTI below 43%, meaning your total monthly debt (including your future mortgage) shouldn’t take up more than 43% of your income. If your debt is manageable and you’re paying bills on time, you’re likely in good shape to buy.

You’re Ready to stay in one place for a few years

Buying a home is a long-term investment, so it’s best if you plan to stay put for at least 3-5 years. This gives you time to build equity (aka wealth) and make the most of your investment.

 If you love your city, feel settled in your job, and don’t see yourself moving anytime soon, buying a home could be the right next step.

 So Are You Ready to Buy?

If these signs sound like you, you might be ready to being your homeownership journey. With stable income, manageable debt, and the right savings plan, buying a home can be a smart investment in your future. Plus, with loan programs offering just 3% down and a great agent who can negotiate closing cost assistance, owning a home may be more within reach than you think.

Still not sure if you're ready? That's okay! I'm happy to answer your questions and help you figure out if buying a home is the right move for you.