How to know you’re ready to buy a home

• A stable job or income history, often around two years in the same line of work
• Monthly debts that leave room for a mortgage payment
• Savings for a down payment, moving costs and reserves
• A credit score of at least 620
• A budget that covers taxes, insurance and upkeep, not just the mortgage

Lenders compare your monthly debts, including the new housing payment, to your gross monthly income. This is your debt-to-income ratio, or DTI. At CapCenter, DTI can be up to 50% for some loans, but a lower number gives you more room in your budget.

Paying down a car loan or a credit card before you apply can raise what you can afford more than you might expect. If you're self-employed, CapCenter uses your tax returns instead of W-2s.

Your down payment is only one part of the cash you'll need. Plan for moving costs, a few things for the new home and a cushion for repairs. Some buyers also need to cover prepaid interest and escrow deposits at closing.

CapCenter's ZERO Closing Costs (restrictions apply) can lower the cash you need at closing, which may let you keep more of your savings in reserve. Low down payment programs and down payment assistance may also help; rules vary by program.

Buying makes the most sense when you expect to stay for several years. Buying and selling both have costs, and time in the home helps you build equity.

Owning also means handling repairs yourself. If the water heater fails, there's no landlord to call. Being ready for that responsibility, in time and money, is part of being ready to buy.

That's normal, and a plan helps. Set a monthly savings goal, pay down balances and keep your payments on time. Check your credit reports for errors. Small steps over six months to a year can change your options.

A pre-approval shows what you can likely afford and what to work on. With CapCenter, pre-approval starts with a soft credit check that doesn't affect your score, and it often takes about 15 minutes.