When Are You Ready to Buy a House? 5 Signs to Look For

Bethany White March 3, 2022 | 5 min read
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Looking for a sign that it’s time to become a homeowner? We’ve got five for you right here. Everyone’s journey is different, but if you can relate to these milestones, it could be time to make your mortgage happen. So, when are you ready to buy a house?

When are you ready to buy a house? 5 signs it’s time.

  • You’re committed to the area
  • The pros of renting don’t outweigh the cons
  • You have enough saved for a down payment
  • You have a steady income source
  • You’re happy with your credit score

You’re committed to the area.

A mortgage can be a great investment, but it takes at least a few years for that investment to pay off. And the truth is, it could take just as long to know if your neighborhood is a long-term fit. If you’ve put down roots (or are planning to) in an area you love, now could be the right time for you to ditch those yearly apartment lease renewals and buy a house.

The pros of renting don’t outweigh the cons.

Renting can be the right fit for people who want flexibility, love the city life, or are still building their credit score. In spite of its advantages, cons like the lack of privacy, lack of control, and rent increases can become more and more frustrating over time. If your need for more space and stability is a priority over the freedom of renting, you might be ready to own a home.

Pro Tip: Want a more transitional move to homeownership? For some, the question may not be “When are you ready to buy a house?” but “When are you ready to start building home equity?” A condo loan could help you build home equity AND enjoy the apartment-style perks you love. Win-win.

You have enough saved for a down payment.

It may be a myth that you have to put 20% down on a house, but it is true that the size of your down payment affects how much you’ll pay over the life of your mortgage. With conventional loans, for example, you could avoid paying private mortgage insurance (PMI) if you put down 20% or more. Putting down more up front could also help you get better interest rates and a lower monthly mortgage payment, especially if your credit score isn’t where you want it to be.

Some loan types allow you to put down as little as 3% (or even skip the down payment altogether if you’re eligible for VA or USDA loans) but that’s typically only if your credit score is high enough. In general, experts tend to recommend putting down closer to 10-20%. So, if you’ve got that chunk of change saved up, you might be ready to buy a house.

You have a steady income source.

Since the pandemic, more people than ever are reevaluating their careers in what’s being called “The Great Resignation.” The freedom to do what you love is always a good thing, but a steady income source is still key if you plan to buy a home. Lenders take your employment and income into consideration when determining how much financing you qualify for. So, to get the best rates possible, you’ll need to prove you can pay for it in the long run.

The good news is the definition of what constitutes a “steady” job is evolving every day. Buying a home doesn’t have to mean compromising on your career goals—you could even buy a home while self-employed. The process might involve more paperwork, but homeownership is not limited to 9-to-5ers.

You’re happy with your credit score.

There’s no denying how much your credit score affects your mortgage experience. A higher score (think 620 or above) will open up more loan options for you and help you qualify for better interest rates. Reaching that higher score is easier said than done, though, and there are still plenty of great financing options for lower credit scores.

Ultimately, your credit goals should be unique to your financial situation and the loan type you need (for some, like FHA loans, you could get approved with a score as low as 580). Credit can take a long time to build. So, if your score is in a place you’re happy with and it’s not likely to change significantly anytime soon—i.e. you know you’ll be making payments on time and you don’t have plans for any other big purchases—now could be a great time to start your home search.

So, are you ready to buy a house?

If these five signs reflect your situation, the answer to “When are you ready to buy a house?” could be “Now.” If you’re still on the fence, that’s absolutely fine. Being a homeowner can be a rewarding experience, but it’s also a big commitment that you shouldn’t rush into lightly. Our loan originators are here to help you make the right decision for you.

If you’re ready to put down roots (physically and fiscally) you might just be ready to buy a house.

Ready to make moves?

One of our loan originators is standing by to assist you with your free rate quote.
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About the Author
When Bethany was a kid, her mom took her to the zoo, museums, and more fun spots—then made her write essays about them. Now, Bethany deploys those skills as a copywriter at Cardinal Financial and has to admit: she owes her mom one. When Bethany’s not dreaming up fresh takes on mortgage lending, you can find her running, spoiling her cat, and refusing to improve as a chef.