How to Prepare to Buy a Home

Buying a house is a big decision—and it’s one you want to be fully prepared for. While it’s easy to get swept up in scrolling listings and dreaming of your future space, it’s just as important to understand the financial and practical steps that go into a successful home purchase.

Here are 10 smart ways to get ready for your first home:

1. Reduce Credit Card Debt

Your credit card balances have a major impact on your credit score—and your ability to qualify for a mortgage. Lenders look at how much of your available credit you’re using (called credit utilization), and ideally, you’ll want that number to be below 30% on each card. Better yet? Pay off your balances completely each month. Less revolving debt also helps lower your debt-to-income (DTI) ratio, another key factor lenders use to determine loan approval.

2. Understand Your Student Loans

Student loans won’t stop you from buying a home—but they are factored in. Mortgage lenders look at your total debt, including monthly student loan payments, when calculating your DTI ratio.

• If you’re on an income-driven repayment plan, the lender may use your actual monthly payment.

• If your loan is deferred, some loan programs will still use 0.5% to 1% of your loan balance as an estimated payment.

The key is to keep your overall monthly debt low relative to your income. You don’t have to pay off your loans, but you do need to show that your payments are manageable within your budget.

3. Start Saving for a Down Payment

You don't need 20% down to buy a house—some programs allow as little as 3% down—but the more you can save, the better. A larger down payment can help:

• Lower your monthly mortgage payment

• Reduce or eliminate private mortgage insurance (PMI)

• Strengthen your offer in a competitive market

Not sure where to start? Our team at Sibcy Cline Mortgage Services can help you explore low down-payment options and local down payment assistance programs.

4. Build a Rainy-Day Fund

In addition to your down payment, make sure you’ve saved up a cushion for unexpected expenses. Whether it’s a surprise plumbing repair or your first big utility bill, it’s helpful to have at least 1% of the purchase price set aside in a home emergency fund.

5. Think Long-Term

Your first home may not be your forever home, but you should still think ahead. How long do you plan to stay? Will your needs change in the next few years (kids, job relocation, aging parents, etc.)? Choosing a home that can adapt to your life—rather than one that’s perfect for right now—can help you avoid outgrowing it too quickly.

6. Show Steady Income

Lenders want to know you have stable, reliable income. In general, they like to see at least two years of consistent employment in the same field. If you’re self-employed or work freelance/contract jobs, be prepared to show tax returns, profit-and-loss statements, or bank records.

7. Know What You Can Afford

It’s easy to fall in love with a home outside your budget. But just because you qualify for a certain loan amount doesn’t mean you should spend that much. Make sure your monthly housing costs (including mortgage, taxes, insurance, and utilities) fit comfortably within your overall budget. Avoid becoming “house poor.”

Want help running the numbers? Use our Buyer’s Guide to Budget to estimate what you can afford.

8. Budget for Ongoing Costs

Owning a home comes with new monthly expenses—utilities, maintenance, lawn care, and sometimes HOA fees. You may also need to budget for:

• Homeowners insurance

• Property taxes

• Routine repairs and maintenance

Plan for these costs early so they don’t come as a surprise.

9. Make a List: Must-Haves vs. Nice-to-Haves

Before you start house hunting, sit down and write out your top priorities. What features are non-negotiable (like a home office or location in a specific school district)? What would be nice, but not essential (like granite countertops or a finished basement)? This helps keep your search focused—and your expectations realistic.

10. Work with a Real Estate Agent

A good agent is your greatest asset, especially if you're buying a home for the first time. They’ll walk you through the process step by step, help you find homes that meet your criteria, and guide you through negotiations, inspections, and closing.

When you partner with a Sibcy Cline agent, you get the support of a trusted local expert—and a whole team behind the scenes to help you move forward with confidence.