How Do I Know If I’m Ready to Buy a Home?
A client of mine sat across from me at a coffee shop in Burnsville and said something I will never forget. “Lesley, I think I want to buy a house. But honestly, I don’t know if I’m ready. How do you even know?” She had a stable job. She had been saving for almost two years. She had decent credit. But she was still unsure. That conversation stuck with me because it captures exactly what most first-time buyers feel. The idea of buying a home is exciting. The reality of actually doing it feels uncertain. And the truth is, there is no single moment where a light switches on and you suddenly feel completely ready. Readiness is not a feeling. It is a combination of factors you can actually look at, measure, and evaluate. So let’s walk through the honest checklist that tells you whether now is the right time to start the homebuying process in Minnesota. Your Income Is Stable and Consistent The first thing any lender is going to look at is your income. Not just how much you make. But how consistent it is. Lenders typically want to see at least two years of steady employment history. If you are a salaried employee, that is usually straightforward. If you are self-employed or work on commission, you will need two years of tax returns to document your income. The question to ask yourself is simple. If someone asked you right now, “Can you consistently make this same income for the next year?”, what would you say? If you can answer yes with confidence, that is a strong starting point. You Have a Handle on Your Monthly Expenses Before you can figure out what you can afford in a home, you need to know where your money is going every month. Some buyers come to me and genuinely do not know what they spend on groceries, subscriptions, going out, and transportation. That is not a judgment. Life gets busy. But buying a home without knowing your monthly baseline is like driving somewhere new without a map. Sit down and look at your last three months of bank statements. Add up what you spend. Then compare that to what you bring home. If there is a clear gap where you are consistently saving money, you are in a much better position than you might realize. Your Credit Score Is in a Range That Opens Doors You do not need perfect credit to buy a home in Minnesota. But your credit score does determine what loan products you qualify for and what interest rate you will receive. Here is a basic guide to know where you stand: A score of 620 or above typically qualifies you for a conventional loan. A score of 580 or above may qualify you for an FHA loan with a lower down payment requirement. A score below 580 can make financing significantly more difficult and will likely require additional steps before you are ready to apply. Checking your credit is free through AnnualCreditReport.com. If your score needs work, that is not a dead end. It is just a starting point that tells you what to focus on first. You Have Savings Beyond Just the Down Payment Many first-time buyers focus entirely on saving for the down payment. And yes, that matters. But it is only part of the picture. When you close on a home, you also need to cover closing costs. In Minnesota, closing costs typically range from 2% to 5% of the purchase price. On a $300,000 home, that is between $6,000 and $15,000 on top of your down payment. You also need money for things that come up after you move in. A water heater that fails. A furnace filter you forgot about. Repairs that were not part of the inspection findings. A general rule of thumb is to have three to six months of living expenses in savings in addition to your down payment and closing costs. If you have that kind of cushion, you are not just ready to buy. You are ready to own. You Understand the Difference Between What You Want and What You Can Sustain This is where a lot of buyers get into trouble. They fall in love with a home that stretches their budget to the absolute limit. Every dollar of their monthly income goes toward housing. There is nothing left for savings, emergencies, or the normal costs of life. A common guideline in the mortgage world is that your total housing costs, including your mortgage payment, taxes, and insurance, should not exceed 28% of your gross monthly income. Some lenders will go higher. But that 28% number is a reasonable target for a payment that feels manageable over time rather than suffocating. If the homes you are looking at keep pushing you past what feels sustainable, that is important information. It does not necessarily mean you should not buy. But it may mean adjusting your target price range or continuing to save for a larger down payment. You Have Thought About How Long You Plan to Stay Buying a home in Minnesota and selling it two years later is rarely a winning financial move. Between closing costs, realtor fees, and the time it takes for your home to appreciate, you generally need to stay in a home for at least three to five years to break even. The longer you stay, the more the math works in your favor. If you are in a stage of life where you genuinely do not know where you will be in two years, that is worth thinking through before signing a purchase agreement. But if you have real roots here, a job you are settled into, family nearby, a community you love, and no plans to leave, that is one of the strongest signs that the timing makes sense. You Are Not Running From Something, You Are Moving Toward Something Some buyers want to purchase a home