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Home Buying

Am I Ready to Buy a House?

So you’re asking yourself, Am I ready to buy a house? That’s a smart question to ask before making one of the largest financial decisions of your life. You’ve dreamed of owning a home for as long as you can remember. But lately, your dream’s been more like a driving force than a twinkling in the eye.

Perhaps your friends are all buying homes and pressuring you to do the same. Or maybe your rent just went up again. Whatever the case, you simply can’t wait another year to buy.

There’s just one problem: Median home prices have reached the $300,000 range and you’re not sure you’re ready to take on a purchase that large, not to mention all the responsibilities that come with homeownership.1

So how do you know you really are ready to get the ball rolling on buying a house? This handy checklist is a good place to start.

You’re Ready to Buy a Home If . . .

If you agree with each statement below, then pack your bags, baby—you’re ready to buy a house!

1. You’re Debt-Free With a Healthy Emergency Fund

If you’re familiar with what we teach at Ramsey, you probably already know we want you to have zero debt and a big fat emergency fund before you buy a home. Why? Because the biggest expenses that get in the way of people saving for a home purchase are all debt-related: student loans (51%), credit card debt (45%) and car loans (38%).2

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

Plus, trying to pay homeownership costs (which come to a median of more than $1,500 per month) with a bunch of other debt payments weighing down your budget will put you one roof leak or HVAC meltdown away from bankruptcy or foreclosure.3 We don’t want that to happen to you—we want you to love being a homeowner!

So, before you buy a house, buckle down and knock out your debts as fast as possible. Once debt’s a distant memory, get busy stockpiling money in an emergency fund—three to six months of expenses should do the trick. Then your budget will be secure and freed up enough to allow you to quickly save a down payment that’s chunkier than a newborn.

2. You Can Afford Monthly House Payments and Home Maintenance

The next way to tell if you’re ready to buy a house is if you know your budget can handle house payments. For example, your monthly house payment should never chomp away more than a fourth of your take-home pay—otherwise, you’d be house poor! To make sure that doesn’t happen, here’s what’s included in that 25% limit:

  • Principal. This is the original amount of money you borrow from your lender to buy a house. It’s the main thing you want to knock out fast as you’re making house payments.

  • Interest. Lenders are interested in letting you borrow their money because they make a profit on what they loan you by charging a fee called interest—calculated as a percentage of the principal.

  • Property taxes. Local governments raise money through property taxes to fund things like schools, law enforcement, fire departments and (supposedly) fixing potholes.

  • Homeowner’s insurance. Sure, homeowner’s insurance adds more dollar signs to your house payment. But paying for coverage will be way less expensive than trying to replace all your stuff out of pocket if your house ever burned down. 

  • Private mortgage insurance (PMI). PMI is a fee you pay on top of your mortgage if your down payment is less than 20%. It goes toward protecting your lender (not you) from losing money if you stop making payments on your loan.

  • Homeowners association (HOA) fees. Basically, HOA fees are for community maintenance and upgrades. If you buy a house in a community that has an HOA, you automatically become a member and will be expected to pay the fee and keep your home up to HOA standards to help increase the overall property value in that community.

To see what these monthly payments might look like for you, use our mortgage calculator. Remember, if the monthly house payment is more than 25% of your take-home pay, take it as a red flag that you’re just not ready to buy a house yet—or try finding a cheaper house or saving a bigger down payment to make the numbers work.

Besides monthly mortgage payments, you’ll also be on your own when it comes to things like home maintenance. When you’re a homeowner, there’s no more calling up the landlord to fix the plumbing. It’s up to you to either fix it yourself or budget for a pro to fix it for you. Home maintenance can cost $1,100 per year.4 So make sure you have room for it in your budget.

3. You Have a Good Down Payment

The best way to buy a home is to put 100% down. If paying cash for your home isn’t in the cards this year, set a goal of saving at least 20% of the home price as a down payment. Otherwise, you’ll be stuck paying that pesky PMI we mentioned earlier.

Whatever you do, never take on a mortgage with anything less than a 10% down payment because you’ll end up paying so much extra in interest and fees and be in debt for decades!

If you do decide to go with a mortgage, choose a 15-year fixed-rate conventional loan—the overall least expensive mortgage and the only kind we ever recommend. Our friends at Churchill Mortgage can walk you through getting preapproved for one.

For a simple plan on how to save up a big down payment fast, download our Saving for a Down Payment Guide.

4. You Can Pay Your Own Closing Costs

Some home sellers cover closing costs to sweeten the deal—but don’t bank on it. On average, the buyer’s portion of closing costs can range from 3–4% of your home’s purchase price.5 For a $250,000 home, that’s anywhere between $7,500­–10,000 to cover items like:

  • Loan origination fee

  • Home inspection

  • Appraisal

  • Prepaid property taxes and mortgage insurance

  • Title insurance

  • Recording fees

  • Underwriting fees

You can put money aside for your closing costs, but you won’t have a clear idea of what those costs will be until you receive a loan estimate form from your lender after you apply for your mortgage. Just be aware that these can change before it’s time to close on your home.

You should receive your final closing disclosure form at least three days before closing. Review it carefully for unexpected cost differences, and ask your lender to explain any charges you don’t understand.

5. You Can Cash Flow Moving Expenses

Don’t forget—buying a house also means you’ll be moving! So make sure to have a separate pile of cash saved up just for moving expenses. Hiring movers can cost $700–1,900 (for a local move).6 Or it can be as cheap as a few pizzas to bribe your friends to help—if they have the cargo space.

Besides the heavy lifting part of your move, here are other expenses to be ready for:

  • Boxes, bubble wrap and other moving supplies

  • Deposits for utilities

  • Cleaning supplies

  • Appliances that aren’t included in your home purchase

  • Any pre-move-in upgrades like painting, new furniture and closet organization

While you wait for your closing date, get good estimates for what these costs will be—request quotes from moving companies, shop for appliances, etc. Pad your move-in budget a bit so things go as smoothly as possible, and don’t let new-home excitement cause you to overspend on items you don’t need right away.

6. You Plan on Staying Put for a While

Okay, another thing to think about before you’re ready to buy a house is if you’re at a place in life where you’re ready to stay in your city for more than a year or two.

Data shows that the longer you stay put in your home, the more equity you earn (equity is how much your home is worth, minus how much debt you owe on it). Sure, it’s obvious you’ll gain more equity by paying down your mortgage. But the other portion of equity is gained by rising property value.

For example, there’s a chance you could buy a house this year for $250,000 and sell it in five years for well over $300,000—simply because you took care of the house and the neighborhood remained popular. Of course, property gains can be slashed by market crashes. But let’s take a look at how years spent in a home impacted property value for home sellers last year:

Time in Home

Home Value Increase

2–3 years


4–5 years


8–10 years


21 years or more



As you can see, homeowners who lived in their homes for many years were able to sell their homes at a higher price than those who only lived in their homes for a short time.  

So if you only plan on staying in your city for another year or so, now might not be the best time to buy a house—all the up-front costs and work you’d put into getting a house probably won’t be worth the small amount of value you’d gain by living in it for a short amount of time. But if you love your city and plan to stay put for at least several years, buying a house is a great investment!

7. You Have an Expert Real Estate Agent You Can Trust

It’s not easy to find a house you love that’s also within your budget—that’s why nearly 90% of all home buyers work with agents who eat, sleep and breathe real estate to purchase their home.8 Plus, having a buyer’s agent by your side brings two big benefits:

  • Save money. In most cases, the home seller pays the commission for your agent—so you pay nothing to get expert help! Even better, a buyer’s agent can save you thousands of dollars on your dream home by fighting for your best interests at the negotiation table.
  • Save time. Without a buyer’s agent, you’ll have piles of paperwork to wade through. Life’s too busy for that! Let an expert who knows all of the laws and regulations specific to your city take care of the red tape for you.

The only problem is there are plenty of dud real estate agents out there. So, to feel truly ready to buy a house, try our Endorsed Local Providers (ELP) program. We make it quick and easy to find top-performing agents in your area who have tons of experience helping buyers like you get the home of their dreams.

Find a top real estate agent 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.

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