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  • Writer's pictureZachary Epps

Is It The Right Time Financially For Me To Buy a Home?

With buying a home, finances and timing are everything. Other factors are key, but these two are the most important.

While the prospect of purchasing a home might seem like a great option, there's far more to consider, financially, than you'd expect.

Because there are so many factors involved, you have to ask yourself several questions before deciding that you're financially ready to take on the responsibility of purchasing a home.

Are you on the verge of buying a house, and are wondering if it's the right time to do so? Consider these factors:

Stable income

Of course, a stable income is a primary requirement, you say!

Nevertheless, there's more to this than you think. Given that many people, businesses and companies are still reeling from the impact of the global pandemic, a stable income isn't as commonplace as you think.

Before you purchase a house, you must feel comfortable in the knowledge that your income is stable and secure not just in the present, but in years to come.

Besides, lenders will require proof of income in tax returns for a minimum of two years, bank statements and down payments before you can get a mortgage.

To put it simply, it's not enough to hope for gifts from friends and family.


Making down payments and covering the costs for mortgage closing is important while purchasing a home.

Depending on the lender and mortgage type, the requirements differ. However, you'll need to consider how much you have saved up, as a higher down payment will lower monthly mortgage costs.


This is another important financial factor to consider. If you have good credit scores, typically 740 and above, you can access better mortgage terms and rates.

Anything lower means that you'll have to shell out much more funds initially, which may be out of your range. If you have a low credit score, it's ideal to first spend some time to build your credit, before preparing to buy a house.


Another factor that determines your financial readiness to buy a home is your debt-to-income (DTI) ratio.

A high DTI ratio means that a considerable amount of your gross income is set aside for servicing debt on credit card, housing costs, student loans, etc.

Lenders consider this aggregate (your DTI) when giving out mortgages. If your DTI ratio is more than 36%, you have low chances of qualifying for mortgages and getting favorable rates.

Down payment considerations

When purchasing a new home, the wise thing is to make a down payment of 20% of the cost of the property. This way, you won't have to pay private mortgage insurance (PMI).

If you have plans to convert the property for investment purposes in the long run or to reside in it for only a short period, you'll understandably be reluctant to make such a considerable down payment .

Also, you should remember that being able to afford to pay for the house at present is not as important as completing all payments in the long run.

Interest rates

If your mortgage has high interest rates, you'll be paying a huge amount monthly. So, it's ideal to ensure that the rates are favorable before deciding to go ahead with the purchase.

A good realtor is precisely what you need if you're ready to buy your dream home. For further information and inquiries, get in touch with me today.

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