There comes a time in almost everyone’s life when they begin considering owning instead of renting their house. But what does it take to own a house? And how do you know when you’re ready? 

DEXSTA is committed to empowering individuals to take control of their finances and navigate big life decisions: like the transition from renting to owning. If you’re unsure if you’re ready, there are a few green flags that can make your decision a little easier. 

Your debt is managed

Managing your debt is no easy task. In fact, the average American spends six to 20 years paying off their credit card debt. It takes planning, commitment, and time. Having a handle on your debt does not mean that you have to be debt-free before owning a house. Only that you “aren’t carrying too much debt relative to what you make.” In other words, you’ll want to know your debt-to-income ratio. 

Your debt-to-income ratio is a big consideration when applying for a home loan. The goal here is to keep this ratio at or below 36 percent. If you’re almost, but not quite, at this point, our DEXSTA home loan professionals can help you come up with a plan to optimize your finances. 

You have financial stability

Debt management is a part of financial stability, but not the whole story. Financial stability means that you have adequate savings, checking, and a regular, steady income at your disposal. Being a homeowner is a much greater responsibility than being a renter. This is why financial stability gives you the confidence of “enough money set aside to weather such emergencies” (like a pipe breaking at 2 am). 

You’ve mapped out long-term financial goals

Long-term financial goals and planning is our bread and butter at DEXSTA. Financial plans in the long-term can include your debt management plan, financial stability, an improved credit score, and the ultimate career and savings goals that you and your family have. Pro tip: This planning is something you can (and maybe should) do each January to make sure you are on track for the coming year. 

What it takes to own a house 

If you’ve checked off the above boxes, it’s good to study up on what it takes to actually own a house. 

Having a good credit score 

When applying for a home loan, a good credit score (somewhere above the 640 range) combined with consistently on-time payments and debt commitments can only help. 

Saving enough for a down payment 

Planning for a down payment is a big part of mapping out long-term financial goals. This signals to lenders that “a borrower has skin in the game.” 

Doing your research 

Coming to the home process prepared means understanding the prices in your area and what is doable within your budget.

When is the right time for you? 

Deciding when to own a home is ultimately a very personal decision. Maybe you’re expanding your family, your rent is rising, or you’re ready to set down roots. Regardless, with benefits like privacy, customization, and investments, owning could be the best decision you’ve ever made. For such a huge decision, DEXSTA is here for you.