April 14, 2021 3 minute read

Ready, Set, Buy: Questions to Ask Before Buying

Am I ready to buy a house? It’s a looming question all renters ask themselves sooner or later. When you start to crunch the numbers and see how much you’ve spent on rent in a year, buying can start to look more appealing. 

But before diving into this life-changing decision, you should be sure your finances are in order. While purchasing a new home may seem like a great option, it could be that renting is still the best choice for you and your needs. To be sure, ask yourself these three telling questions before moving forward.

Where do I see myself in the next three to five years?

Your future plans should heavily influence your decision to rent or buy. If you’re not ready to stay in the same zip code for at least four or five years, buying a home may put unnecessary strain on your finances. On the other hand, if you plan on staying put, you may find that purchasing a property in or around where you currently live will be your best bet. If it’s the latter, consider a single-family, a townhome, or even a condominium unit, especially if the cost is close to what you already pay to rent.

What’s my DTI?

A DTI is your debt-to-income ratio. This number helps mortgage lenders determine if you’re able to make your borrower payments. Even if you’ve got quite a bit saved up, your DTI can still influence whether you’ll be approved for the necessary home loans. 

To calculate this figure, add up your monthly expenses—such as car payments, credit card payments, personal and student loans—and divide this total by your monthly gross income. Recommended DTI ratios can vary depending on the lender you’re using, but it’s generally agreed that this percentage shouldn’t be above 43%. If you find yours is below this, buying could work for you. If your DTI is above 43%, don’t worry! Other suitable options can help you make homeownership a reality sooner than you think. 

Can I afford a down payment?

If you’ve already begun researching steps for first-time home buyers, you may have found a few sources that recommend a 20% down payment, but this myth has been debunked. Since the arrival of Federal Housing Administration (FHA) loans, this requirement is no longer essential to securing financing. In fact, there are several other types of loans out there that can support you on the home buying journey. Veterans are eligible for VA loans that require a 0% down payment. Other options include HomeReady and Home Possible Advantage loans that require as little as 3%. Before making a decision, it’s best to consult a real estate professional for a full picture of the best options for your present financial situation.

Home buying is a complex, but rewarding undertaking. This information provided here is only a portion of what you’ll need to know to get started. If you’re ready to learn more about buying a home, check out this Is it Time to Buy a Home? flowchart to see if purchasing is the best option for you.

Jonathan Rayo


Jonathan Rayo is a Senior Associate on the Residential team at Senné. He specializes in buyer representation for first-time homebuyers and investors in Massachusetts, with a focus in the Greater Boston, Cambridge, and Somerville markets. His familiarity with the housing market affords him a practical understanding of market trends he communicates to help buyers and sellers make informed decisions.

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