Are you ready to buy a house?

Buying a home is seen as a sign of maturity, a sign that you’re ready to move on to the next step of your life. Owning your own home has many benefits – you can do what you want with it (homes in a HOA being the exception), you have a place to call your own, and if you’re lucky, in time you can sell it for a tremendous profit. However, it’s one thing to want your own home and it’s another thing to be prepared for owning a home. Here are some things you should think about before you decide if you’re ready to buy a house or not:

Down payment

In simplest terms, the more money you’re able to use as a down payment, the cheaper your home will be in the long run. This is because you won’t need to take out as big of a mortgage. Traditionally, you would want your down payment to be about 20% of the total cost of the house. For example, if the house you wanted was $200 000, you’d need a down payment of $40 000. Today, you can get by with a smaller down payment – but expect the terms of your mortgage to be more unfavorable.

Depending on where you live, if your mortgage down payment isn’t strong enough you may be required to pay mortgage insurance. This is intended to protect the lender in case of default. You can learn more about down payments and mortgages by clicking here.


When you think about your income, you need to think not only about how much you make, but how stable it is. For example, if you’re making $60 000 a year but work in an industry that could leave you unemployed at the drop of a hat, you need to seriously think about whether you’re willing to take on the risk of home ownership. Remember, once you’ve signed a mortgage, you’re on the hook for many, many years. Many times, a couple can work together to pay the mortgage until kids come along and one of them stays home. When you think about your income, you need to think not just months down the line, but decades.

Emergency Fund

Many people make the mistake of putting all of their savings into a down payment. However, if anything goes wrong, they end up in trouble. If you’re considering home ownership, you should have at least six months worth of living expenses saved up. That means if you regularly spend $2000 a month, you should have $12 000 saved not including your down payment.

Debt and Credit

Before giving out a loan, a bank will look at all of your credit, in addition to your employment history, to get a sense of whether they believe you can pay the mortgage back or not. If you have a large amount of debt or frequent credit issues, home ownership may not be for you. The more debt you take on, the more difficult it will be to climb out. In addition, if you have credit problems it may be difficult or impossible for you to obtain a mortgage.

Long-term Commitment

Unless you’re planning to do renovations and flip your home, home ownership is a long-term commitment. Before you sign on a contract that keeps you in one spot for 15 to 20 years, you need to think about whether you’re ready to commit for that long. Do you have plans on living in a different city? Is there a realistic chance that your company may transfer you? Ultimately, only you can decide whether you’re ready for home ownership or not.



This article was written by Cristobal Ravazzano, a web strategist for

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