Are You Really Ready to Buy a Home? 5 Signs You’re Financially Prepared
- Scott Sweeney
- May 6
- 3 min read
Buying a home is a big financial and lifestyle decision—but how do you know if you’re truly ready? Beyond just wanting your own place, you need a solid financial foundation before taking the leap. Here are five signs you’re financially prepared to become a homeowner.
1. You Have a Stable Income
Lenders want to see a consistent, reliable source of income. If you’ve been employed steadily for at least two years (especially in the same industry), that’s a great sign you can handle monthly mortgage payments and homeownership expenses.
✅ Pro tip: If you're self-employed, be prepared to show at least two years of tax returns and business income documentation.
2. You’ve Saved for a Down Payment (and Then Some)
While you don’t always need 20% down, most loan programs require at least 3% to 5% of the purchase price. But that’s not all—you’ll also need to budget for closing costs, moving expenses, and an emergency fund for unexpected repairs.
✅ Ready buyers often have at least 3–6 months of living expenses saved after their down payment.
3. Your Credit Score is in Good Shape
A higher credit score can mean a better interest rate and loan terms. Most conventional loans require a minimum credit score of around 620, while FHA loans may allow for lower scores.
✅ Aim for a score of 700+ to get the best rates—and check your credit report for any errors or outstanding debt.
4. You’ve Paid Down (or Managed) Your Debts
Mortgage lenders use a debt-to-income (DTI) ratio to assess your ability to take on new debt. If you’ve paid off or significantly reduced credit cards, car loans, or student loans, that shows you’re in a better position to handle a mortgage.
✅ Ideally, your monthly debt obligations should be less than 43% of your gross monthly income.
5. You’ve Budgeted Beyond the Mortgage
Homeownership comes with costs that renters don’t have—like property taxes, homeowners insurance, maintenance, and repairs. If you’ve researched and feel comfortable budgeting for all these expenses, you’re ahead of the game.
✅ Create a mock monthly budget based on your estimated mortgage and homeownership costs—can you comfortably manage it?
Final Thoughts
Being financially ready to buy a home is more than just having a down payment—it's about stability, preparedness, and confidence in your long-term financial health. If these five signs sound like you, it might be time to stop renting and start investing in a place of your own.
Curious what you can afford or what loan programs might be right for you? Let’s talk—I'm here to help you take the next step.
Scott Sweeney
Your NorCal Realtor
M&M Real Estate
BRE Lic# 01938720
Cell: Call/Text 707-330-2324
About Scott Sweeney
SweeneySells
Full Time Realtor 13 Years +
Over 100 Families Served
Top 5% Producing Agent
Buying & Listing Specialist
Contract & Negotiation Ninja
CSUS Business & Marketing Graduate 2006
With quickly serving over a 100 families, Scott Sweeney has become a top 5% producing Realtor in the greater Sacramento area who has helped clients from the Bay Area to South Lake Tahoe. Scott has a Bachelor Of Science in Business Administration, with a concentration in Marketing from CSUS. His education, and extensive background in the hospitality, marketing, and real estate industries, have helped Scott to become one of the leading, and most sought after agents in the area.
Reach out to SweeneySells today, and take the first step towards your real estate goals!
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