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Am I ready to buy a home?

The short answer

You're ready when you can pay three things without emptying your savings: the down payment, the closing costs, and a cushion for repairs after you move in. Lenders will also look at your credit and how much of your income already goes to debt. Start a few months early: small fixes to your credit and savings can change the rate you're offered.

scheduleWeeks to months of preparingpaymentsClosing costs: often 2%–5% of the pricesavingsKeep a repair cushion
By David Knorr · Last reviewed October 28, 2026

What you need saved

  • The down payment. Some loans accept as little as 3% for first-time buyers, and an FHA loan as little as 3.5%. On a conventional loan, putting down less than 20% usually means paying PMI every month.
  • Closing costs. Often 2% to 5% of the price, paid at closing on top of the down payment.
  • Due diligence costs. The inspection and any extra tests, paid up front even if you walk away.
  • A repair cushion. Every home needs something in the first year. A cushion means a surprise doesn't land on a credit card.

Help with your down payment

The federal government and every state offer help for first-time buyers: down payment help as a grant or a 0% loan you repay when you sell, and loans that need only 3% to 3.5% down. Most have income and price limits, and most must be set up through a participating lender before you close, so look early. Find the programs that may fit your home and household.

What lenders look at

  • Your credit score. A higher score usually means a lower rate, and a lower rate saves money every month for years.
  • Your debt-to-income ratio. The share of your monthly income that goes to debt payments, counting the new mortgage.
  • Steady income. Lenders usually want about two years of history. If you're self-employed, expect to show tax returns.
  • Where your savings came from. Large deposits need a paper trail. Money from family usually needs a signed gift letter.

Budget from the monthly cost, not the price

The price you can be approved for and the payment you can live with are different numbers. Your monthly cost is the loan payment plus property tax, homeowners insurance, any HOA dues, PMI if you have it, and upkeep. Work out what you can pay each month and still save, then work back to a price.

Dos and don'ts

check_circleDo

  • checkCheck your credit reports for free and dispute any errors.
  • checkKeep records of where your savings came from.
  • checkSet your budget from the monthly cost you can carry.
  • checkKeep money aside for repairs after closing.

cancelDon't

  • closeOpen new credit cards or finance a car while you're buying.
  • closeMove large sums between accounts without a record.
  • closeLet the most you're approved for decide your budget.
  • closeCount the down payment as the only cash you need.

Questions to ask

Yourself

  1. How long do I expect to live here? Buying usually pays off over years, not months.
  2. What monthly payment can I carry, with taxes, insurance and HOA dues included?
  3. After closing, how much will be left in savings?

Terms on this page

Down paymentFHA loanPMIClosing costsHome inspectionDown payment assistanceDebt-to-income ratioProperty taxHomeowners insuranceHOA

infoGeneral information based on the standard Georgia REALTORS® purchase contract and public guidance. Your own contract decides: read it, and ask your agent or closing attorney about anything that matters. Not legal or financial advice.

Sources
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