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6 Essential Rules to Follow Before Buying a Home

Buying a home is one of the biggest financial decisions you’ll ever make, and jumping in unprepared can lead to major regrets. Before you take the plunge into homeownership, follow these six essential rules to stay financially secure and set yourself up for long-term success.

1️⃣ The 28% Rule: Know Your Limits
Just because you can get approved for a larger mortgage doesn’t mean you should take it! To maintain financial stability, your monthly mortgage payment should stay under 28% of your gross income.

For example, if your gross monthly income is $6,000, aim for a mortgage payment of $1,680 or less. Sticking to this guideline helps ensure you have enough left for savings, emergencies, and enjoying life beyond your mortgage payment.

2️⃣ Skip the Big Banks—Go Local!
Big banks might be convenient, but when it comes to mortgages, a local lender is often the better choice. Here’s why: ✅ They specialize in mortgages, not just generic banking services.
✅ They understand the nuances of the local real estate market.
✅ You’ll likely get better service and faster turnaround times.

Working with a mortgage broker or local lender means getting personalized guidance rather than being treated like just another file in a corporate system.

3️⃣ Is Your Emergency Fund Ready?
Homeownership isn’t just about affording the monthly payment—you need a solid financial cushion. Before you buy, aim to have 3-6 months of living expenses saved in a high-yield savings account.

Why? Unexpected expenses happen: a sudden job loss, medical emergency, or major home repair can throw your budget off track. Having an emergency fund ensures you’re prepared for the unexpected.

4️⃣ The 1% Maintenance Rule: Budget for Upkeep
Owning a home means handling maintenance and repairs. A good rule of thumb is to budget at least 1% of the home’s value per year for upkeep.

For a $400,000 home, that’s $4,000 per year ($333/month) in maintenance costs. This includes things like:

Roof repairs
HVAC servicing
Plumbing issues
Landscaping upkeep
Don’t get caught off guard—factor maintenance into your budget from day one.

5️⃣ Plan for the Long Haul: The 5-Year Rule
Buying a home is a long-term commitment, and ideally, you should plan to stay put for at least five years. Why?

It takes time to build equity and offset closing costs.
The longer you stay, the more likely you are to profit when you sell.
Short-term market fluctuations can impact your resale value, but long-term ownership helps smooth out those bumps.
If you’re unsure about your job stability, future plans, or location preference, renting might be the better option until you’re ready to commit.

6️⃣ Mortgage Shopping: Don’t Settle for the First Offer
Did you know you have a 14-45 day window to shop for mortgage rates without multiple hard inquiries hurting your credit score?

Here’s how to get the best deal: ✅ Get at least three mortgage quotes—comparison shopping can save you thousands!
✅ Negotiate! Many lenders can offer better rates or lower fees if you ask.
✅ Look at the full loan package, not just the interest rate—fees, terms, and closing costs matter too.

Take the time to explore your options and secure the best mortgage deal for your financial future.

🏡 Ready to take the next step? Let’s talk about your homeownership goals and get you prepped for a smart and successful purchase. Comment “READY” to start your journey or “GUIDE” to receive a free homebuying guide!

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