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What Age Should I Buy a House

Before doing anything else, it's a good idea to do your homework to make sure you're ready to take the plunge. After all, it will probably be the biggest purchase you'll ever make! At the end of the day, regardless of what interest rates look like or how old or young you are, the best time to buy is when you're ready. Read on for a few things to think about and consider (regardless of your age).

Happy couple sitting on porch by plants

Have a Steady Income

Before purchasing a home, it's important that you feel secure and can maintain your income at its current level (or higher). To qualify for a loan, you'll need to show a lender your employment history, past pay stubs, and tax returns for the last two years, along with other paperwork. Ever wondered how your application is approved? Find out more in our article about how lenders decide to approve a home loan.

How Long Do You Plan to Stay in Your Home

Since closing costs can run up to 6% of the cost of the home, it's important that you plan to stay in your home for at least a year or two so you can recoup those costs and build equity (the difference between what you owe on your home and what your home is currently worth). If you're unsure, ask a mortgage lender to help you calculate how long it will take you to pay off the closing costs on your loan.

Know Your Credit Score and Review Your Credit Report

To order your free credit report, visit If you want to improve your credit score (and your chances of approval) before you apply for a home loan, check out our article on How to Boost Your Credit Score. A strong credit score may also help keep your interest rate low on a new loan.

Please note: If you're shopping around for the best rates on a loan, try to submit your applications within a 14- to 30-day time period of each other. This ensures your credit score may not be impacted each time your credit history is pulled within that window.

Keep Your Debt Low Compared to Your Income

The comparison between your debt and income is called debt-to-income ratio and helps lenders determine how much home you can afford to buy when applying for a mortgage. The ratio is determined by dividing your monthly debt payments by your gross monthly income (the amount you make before taxes and other deductions). Debt payments can include home loans, car payments, student loans, minimum credit card payments, and other expenses.

Determine How Much Home You Can Afford

After finding out your debt-to-income ratio, make sure you crunch the numbers to see how much you can comfortably spend on your home. Even if you qualify for a certain amount, that does not mean it makes good financial sense to take on that large of a mortgage payment. Some experts recommend that you don't spend more than 28% of your gross income on a mortgage payment. This would mean that you shouldn't spend more than $28,000 a year (or about $2,300 per month) on mortgage payments if you earn $100,000 before taxes annually. Check out WaFd Bank's home loan calculator to calculate possible monthly mortgage payments.

Keep an Emergency Fund

When it comes to saving, it's generally recommended that you have enough money saved to cover three to six months of living expenses. After making a down payment and paying for closing costs on your home, make sure you still have money in your emergency fund just in case.

Build a Budget and Stick to It

Paying for a house involves a lot more than your monthly mortgage payment. You'll want to factor in possible increases in monthly bills like electricity in the winter and water in the summer and costs for any home repairs. To better manage your budget, find an app or create a worksheet to track your typical monthly income sources and expenses (every penny). This will help you see where you can make some cuts and figure out where you can comfortably save. Even $10 a month adds up over time!

WaFd Bank is Here to Help

If you'd like help with budgeting, give us a call at 800-324-9375 or visit your local branch to learn more and get details on our checking accounts and savings accounts. If you're a first-time homebuyer, WaFd Bank has programs available to help you qualify, get a competitive interest rate, and buy a home with an affordable down payment. Check out our Smart Start home loan, which allows you to buy a home with just 3% down and apply for a grant to help you buy a home.

Talk with us to find a home loan option that works for you with competitive interest rates. Contact your local loan officer today!

Loans subject to credit approval.


Find your local WaFd Bank Branch


Find your local WaFd Bank Branch

We're nearby, and we'll sit down with you and answer any questions you may have.