5 Steps to Take Before Buying a Home

Do you feel like owning a home is an unrealistic dream?

Many young Americans feel that homeownership is not a realistic option these days. They have stepped out into the workforce only to struggle to find a job and to have student debt hanging over their heads.  

The federal government has issued new mortgage rules that can make first time homeownership feel far off. The good news is that these young Americans don’t have to feel discouraged.

Even if you are not ready to purchase a home today, it doesn’t mean that you are stuck. There are steps to take to prepare yourself for homeownership and today, we are sharing those steps with you.

Here are 5 steps to help prepare you for homeownership.

  1. Be Employed for At Least 2 Years
    This has to be our first step to prepare for homeownership. The federal government wants you to be employed for at least 2 years before they will insure your mortgage. That is 2 years of steady income. In the next steps, we will share about what to do in those 2 years.
  2. Create a Budget
    Creating a budget is an essential step to homeownership. Being able to be on top of your money is one of the best things you can do for yourself. As author and speaker, John Maxwell said, “A budget is telling your money where to go instead wondering where it went.”
  3. Pay Off Debt
    Your total monthly debt cannot exceed 43% of your total monthly income. Debt includes student loan payments, car loans, and credit card payments. The next step is to pay these debts down or pay them off. By doing this, you are setting yourself up to purchase a bigger and better home.
  4. Establish an Emergency Fund
    MSN Real Estate recommends this step as well. Having a 3-6 month living expense emergency fund can reduce an extraordinary amount stress when you move into your first home.

    The emergency savings is different from your 20% down payment and is meant for emergencies like the hot water heater breaking or other unexpected expenses that come with owning a home. 
  5. Save For Your Down Payment
    When you have paid off your student loans and have 3-6 months worth of living expenses in the bank, now it is time to save for your down payment.

    When it is time to purchase your home, having a down payment of 20% is going to make getting approved for a mortgage much easier.


Before you know it, the 2 years of steady income and following these steps will be over. Purchasing your first home is an exciting life event and is not that far off.  You will have the keys to your new home in no time. When you are ready, we at the Jamey Kramer Group would be honored to help you find the home of your dreams.