The Latest News on Student Loan Forgiveness

Skip to Main Content
Home Buying

5 Must-Dos Before You Buy a Home

If it hasn’t happened already, you can count on it happening in your area soon: home-buying season!

It’s easy to get carried away in the excitement of home shopping and the idea of a new life in a new home, so let’s take a moment to review the basics. How should you prepare, and what challenges can you expect when you start looking for your brand-new home?

1. Kick debt to the curb and pile up cash.

First of all, you need to know when it’s time to buy a home—and it has nothing to do with the calendar or the discovery of a great deal. You should be out of debt and have a fully funded emergency fund in the bank before you ever think about buying a home. Most people don’t wait to have this foundation in place when they buy, which leads to tough times when they face unexpected expenses or a job loss.

2. Set yourself up to win with a nice down payment.

Next, you need to save up a down payment of at least 10%, but 20% is better since it will allow you to avoid private mortgage insurance payments. Yes, you can still find mortgages that require much smaller down payments—but if you can’t afford a decent down payment, that’s a clear sign that you can’t afford a home.

See how much house you can afford with our free mortgage calculator!

Related: Want to learn more about how to save up a down payment on a house fast? Our 5-Day Home Buyer Savings Plan will help you discover simple tricks to save a five-figure down payment by this time next year!

3. Keep your budget conservative.

Now that you have your financial ducks in a row, it’s time to figure out how much you can afford. Stay conservative and keep your payments to no more than 25% of your take-home pay on a 15-year mortgage. Limiting your payment to 25% of your take-home pay means you’ll have money left in your budget for other goals like saving for retirement and your kids’ college—even paying off the mortgage early. And don’t forget, your new home comes with extra costs like yard maintenance, roof replacement or repair and upkeep for your heating and cooling system.

4. Don’t let emotions rule.

You’ve been extremely diligent and intentional to get to this point. Now that it’s time to shop for homes, stay smart. It’s way too easy to blow off your budget if your emotions take over and you fall in love with a specific home or neighborhood. Patience is the key. If you don’t find something to love in your price range, just wait. The right home will turn up before long.

5. This is no time to go on autopilot.

It may feel like you’re in the home stretch once you make an offer on your new home, but don’t let your guard down now! There are still some important hoops of the home-buying process to jump through like negotiations, appraisals and the home inspections. Then there’s the final walk-through and closing. You need to stay on your toes through each step to make sure your home purchase goes smoothly and any surprises are dealt with before you move in.

Buying the right home at the right time takes a lot of preparation and hard work, but the reward is knowing your home will be a blessing, not a curse.

You can take another step to make sure your hard work doesn’t go to waste by working with a buyer’s agent. Most homeowners work with a real estate agent to sell their home, but they work for the seller—not for you. An experienced buyer’s agent will speak up for your concerns

Your buyer’s agent will also save you time and money by helping you find great homes in your price range, negotiating contracts on your behalf, and handling the final closing.

If you aren’t already working with an agent, it's easy to find out who Dave recommends in your area.

Find a real estate pro today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

Related Articles

best places to live in Alabama
Home Buying

Best Places to Live in Alabama

Thinking of relocating? Alabama has a lot to offer—from a low cost of living to white sandy beaches. Check out the best places to live in sweet home Alabama.

Ramsey Solutions Ramsey Solutions
best places to live in California
Home Buying

Best Places to Live in California

California seems to have it all—sun, beaches, cities, mountains, deserts, Disneyland. But where are the best places to live in California? Check out this totally cool list of awesome places, dude!

Ramsey Solutions Ramsey Solutions
How Much House Can I Afford?
Home Buying

How Much House Can I Afford?

Figuring out how much house you can afford is tricky. But our home affordability calculator will help you calculate a budget that will work for you.

Rachel Cruze Rachel Cruze

Thanks for sharing the gift of hope with a friend or family member!

Sharing this article could lead to the life change that someone needs to change their family tree for the better!