Buying a home is one of the biggest purchases that young adults make, but this can also make it super nerve wracking and stressful. For me, a good way to eliminate stress is to know as much as I can about something before diving in, so that’s why I’m making this post! I want to help you determine when you are ready to buy a house and give you some insight as to what the process is like!

What’s helpful?

The biggest step to purchasing a home in today’s market is getting pre-approved. This basically means that you present all of your financial information to a mortgage lender before you even look at homes. Getting pre-approved allows you to understand how much house you can buy and allows you to put an offer in quickly if you find one you like. It can be kind of tricky to get this approval for several reasons. I suggest shopping around for mortgage lenders to get the best offers possible.

Some important documents that you will need are pay stubs, proof of employment, and information on all debts you have. I personally believe that you should buy a home as quickly as possible because rent is not serving your future. However, in order to get a house that is suitable, making between 40-50k per year seems like the magic number in terms of income. However, if you are debt free, that gives you a bit more wiggle room. Most lenders require at least one full year of full-time work experience so starting early on work if possible is a great idea.

Another helpful tip is to work with a realtor that is experienced and that you trust. Especially in a volatile market, it is important to work with someone who understands different types of contracts and can work quickly. Also, as a first time home buyer, there are several opportunities for unique loans. Some properties don’t qualify for those loans so making sure your realtor is well-versed with first time home buyers is key.

What’s harmful?

Having debts is the most harmful thing to getting a mortgage. This is because of something called the debt-to-income ratio. This is exactly what it sounds like, a ratio of your debt compared to your income. Most lenders will not give you a loan if your debt is over 50% of your income monthly. So, it’s definitely beneficial to pay off as much debt as possible as soon as possible.

Not having money in your savings account is another red flag. You want to have money in your savings account that you can use towards a down payment, closing costs, and realtor fees. These are all things that you don’t often think about but add up very quickly. Even though there are programs for first time home buyers that require 0% down, other loans will require private mortgage insurance or PMI, if you don’t put 20% down. This is another payment stacked onto monthly bills that is somewhat easy to avoid.

Should you buy a house at this point in your life?

Buying a house is a huge decision but such a fun one! I feel that you should buy a house as soon as you can and it makes sense for your lifestyle. If your income is there and you feel like you can buy in a place you ENJOY living, then absolutely go for it! If you are in more of a transient position with your job right now, then maybe hold off! The biggest thing to remember is that your timeline is your own. Don’t rush into it and make a mistake. Take time to make sure your ducks are in a row and the perfect house will come at the perfect time! Happy house hunting, friends!