Five Things to Know Before Buying a Home

Buying a house can be intimidating, whether it’s a starter home or your final homestead. However, you don’t have to be a real estate tycoon to get the most out of the process and find what you’re looking for. Our JudyMac team wants you to feel confident as you search for your perfect home, so we’ve put together this guide to give you a thorough understanding of the five things to know before buying a home. 

Know Your Finances

Let’s be honest: buying a home requires a substantial financial commitment. To get started, you’ll need to know your credit score and debt-to-income ratios. These are the primary factors that determine your options moving forward. 

Credit Scores

When it comes to your credit, it’s essential to have a healthy credit history before you can qualify for a mortgage. The typical minimum credit requirement is 620, with more competitive interest rates as your score increases. 


The debt-to-income ratio can be a tough obstacle, especially for younger homebuyers. Mortgage companies want to see that your cash flow exceeds the amount you pay to other lenders and a DTI below 36% (although loans are often considered payable if the DTI doesn’t exceed 43%.)

Loan Amounts

Before looking for a home, consider applying for pre-approval through a few credit lenders. A lender can provide you with a pre-approval letter with all the information about how much you can borrow and under what conditions. You can compare offers to find the lowest rates and fees when you do this on the front end of your home-buying search. 

How Much Home You Can Afford

Ideally, you want to keep housing costs to no more than 30% of your income, including your mortgage payments, property taxes, homeowners insurance, and the like. By capping your expenses around this benchmark, you can guarantee a budget for the rest of your life’s expenses. 

Down Payments

Now, let’s talk down payments. On average, it’s recommended to have at least 3-7% of the down payment for your price range, with an additional 3-6% for closing costs.

The Home-buying Basics

Once you’ve started getting your financials in order, you can begin to consider the home-buying basics. The first is where you want to live—here in Memphis, there are so many unique neighborhoods and communities, from the city to the suburbs, so there is something for everyone. 

Consider the accessibility you’d like: do you want to live somewhere walkable? Are good schools close by? An active social scene? This can help you start the process of finding your perfect home. 

You should also consider the type of home you want. If you have a family, you may want several bedrooms and a backyard, while a bachelor may be looking for an open floor plan with a view. 

Regardless of your metrics, having a clear idea of what you’re looking for will help narrow your search. Having a list of “must-haves” and a list of “willing-to-compromises” can help, too!

Research the Market

We said it before, and we’ll say it again—you don’t need a real estate certification to find the information you need! Check out and other local listing sites in the area you’re searching for to get a general idea of the market. 

Keeping an eye on the real estate market in the area you want to buy will keep you updated on home prices, demand for homes, and available inventory. 

Expect the Unexpected

While home values typically rise over time, the real estate market fluctuates based on several factors. That’s why we encourage you to prepare for everything that may come your way! 

Homeownership comes with additional responsibilities that renting doesn’t always prepare you for. When something goes wrong in your home, there’s no landlord to call for a quick fix. Instead, you’ll have to cover any repairs on your own, so it’s essential to be mentally, emotionally, and financially prepared to pivot for whatever you may need. 

Find What Fits Your Lifestyle

Only you know what you want and need, including choosing to rent or buy. In many cases, a mortgage can be cheaper than rent, especially with rental rates on the rise nationwide. 

Ownership also allows you to renovate and redesign your space as you wish and gives you the flexibility for a growing family. It can also be tough to find landlords who accept pets, so buying a home could be just what you need if you have a furry friend. 

Find Your Next Home with the JudyMac Team

Finding a home doesn’t have to be a stressful time. Make the most of your home-buying process with these tips and our JudyMac team of realtors. Let’s find your next home together!

Post a Comment