How To Tell If You Are Ready To Buy Your First Home

Posted by Lauren Spencer on Sunday, August 11th, 2013 at 6:01pm.

Is it the right time for you? Maybe you have been thinking of buying a Santa Cruz property, but you are not sure if you are ready yet to make the commitment. Buying your first home is a major life decision and it will require a lot of thought before you proceed.

How do you know when you are ready to make your home purchase? Here are a few things to keep in mind that will help you determine whether it’s time to buy your first home.

Do You Have Control Over Your Finances?

You keep a budget and you responsibly spend less than you earn. You pay off your credit card in full every month. You know where your money is coming from and where it goes. If you feel like you have a handle on your financial life and you have strong money management skills, you will be ready for the responsibilities of home ownership. Why not make a mock budget to estimate how you would cover the expenses of mortgages, property taxes, utilities, etc?

Is Your Credit Report In Good Shape?

Take a look at your credit report before you decide to buy a home, because a decent history will help you to get a much lower interest rate. Watch out for missed payments for the year or two before you consider buying the house, as this will bring down your score.

Do You Have A Down Payment Saved Up?

It is recommended that you have a down payment of at least 20% of the home’s value when you buy. You can get around this by using low down payment loans, but they will cost you a lot of money in interest. Besides, it’s smart to have at least 20% equity in your home to start with so that you don’t lose money if you need to move.

Do You Have A Reliable Source Of Income?

When you buy a home, you will be making a long-term financial commitment, so you will need a steady and reliable cash flow to cover your monthly payments. How reliable is your job? Will you still be earning five years from now? What if you and your partner have a child and you want to stop working?

Do You Have An Emergency Savings Fund?

Before buying a home, you should have enough cash in a savings fund so that you could cover three to six months of your living expenses. If you lose your job, get ill or even experience a natural disaster, you will be able to still make your mortgage payments until you recover. 

These are just a few things to consider before deciding whether you are ready to buy your first home. For more information about buying and selling a Santa Cruz home, email me at or give me a call at 831.662.6522 or email me at if you have any questions. 

For additional real estate information, please visit my home page at


make a mock budget

savings fund

down payment

About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

Join Lauren On Social Media

Leave a Comment