How to Get Ready to Buy a House Someday

It begins with the question of whether it makes the most financial sense for you to rent or buy right now. But if the answer is "buy," you're going to want to start thinking about things like saving up for a down payment, lowering what's called your debt-to-income ratio, and boosting your credit score. They're key to helping you get the house you want — but they can take some time to prepare.

Here’s where to start — and other good steps to take as you get closer to being ready to buy.

1. Start saving for a down payment

Traditional financial advice says that you should aim to build up a 20% down payment — so if you wanted to buy a home for $200,000, for example, you'd need $40,000 in cash. It can seem impossible to save up the full amount — know it's not impossible to get a mortgage with a smaller down payment. 

Either way, you're going to want to save up as much as you can ahead of time. 

2. Pay down as much debt as you can

Carrying some debt can be a part of building your credit, because building up a record of on-time payments is part of maintaining a good credit score.

3. Check your score like mortgage lenders do

A good credit score is an essential tool when it comes to buying a home. It will help you get the best interest rates and qualify for certain mortgage opportunities. If you still have some work to do on your score, you'll need to start working on it for about six months to a year before buying a home.

4. Don't make any "hard" inquiries before house hunting

Don't apply for any loans or new credit cards in the six months before buying a home. Each of these actions triggers a "hard inquiry," which lasts 1-2 years on your report and can dip your score.