Are You Ready to Buy ?


Most of the time purchasing a home seems like a dream that is many years down the road. There is a preconceived idea that you have to have large amounts of money saved up and a hefty salary in order to buy a home. Most stick to renting year after year while saving, when in reality, they could be putting that money towards the purchase of a house.

With these following considerations, you could be a homeowner much earlier than you thought.

Your Salary

The salary you make is going to be a big part of whether or not you are ready to buy a home. Although you will need a steady flow of income, don’t think you need to be making hundreds of thousands to get a house. Lauren Anastasio is a certified financial planner and gives the following equation to determine what a realistic mortgage amount would be:

Multiply your salary by 2.5, and then add what you would be spending on a down payment. Your total amount is the max mortgage that you should shoot for.

You also need to consider regular expenses that come with having a home such as taxes, insurance, and maintenance.

The Down Payment

I am sure you have always heard that to buy a house, you put down 20%. This is not necessarily true. While it will help with monthly payments and lower rates, it is not the only way to buy a home. 20% is not a realistic number these days and that should not stop younger people from homeownership. There are other options like conventional loans which only require a minimum of 3% down, or FHA loans which go as low as 3.5% down.

Take a look at what you have saved and the prices that houses are going for in your desired area. You may be able to make a move quicker than you imagined.


Debt is not always a bad thing. There is no need to worry if you are still paying off your car or have student loans that hit every month. It honestly could help you! Showing lenders that you are responsible will help. It is great for them to see that you are paying these debts off on time each month. It will instill a little more trust in you.

However, if your current debts exceed 7% of your monthly income, it is best that you wait a little longer before adding a mortgage on top of that.

You also do not need a perfect credit score in order to get a mortgage. The cutoff for most loans tends to be around 580. If your credit score falls below 700 the lenders could question if you are a risky investment. It is best to build up your credit as much as possible so that lenders feel confident in your ability to pay off the loan.

If this has changed your mind and you want to explore the options of homebuying, please reach out!

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