Home Purchase

Why Care?

Buying a home is the largest financial decision most people make — and one almost universally approached with insufficient preparation and analysis.

A home is not automatically a good investment. For many people in many markets, renting and investing the difference is financially competitive with buying. The decision requires honest analysis of your specific situation.

The real cost of homeownership extends far beyond the mortgage: property taxes, insurance, maintenance (budget 1–2% of home value annually), HOA fees, and transaction costs (5–10% to buy and sell) all affect the true return.

A home purchase that stretches your budget too thin creates compounding financial stress: less savings, less flexibility, and vulnerability to any income disruption.

Buying a home you can't genuinely afford is one of the most financially damaging decisions available — the 2008 financial crisis demonstrated this at scale.

Save a genuine 20% down payment. Dave Ramsey recommends a 15-year fixed-rate mortgage at a payment no more than 25% of your take-home pay — a strict standard that ensures housing doesn’t crowd out retirement savings and wealth-building. The 20% down payment eliminates PMI, secures better rates, and ensures you start with real equity. If you can’t hit 20% down, you are not yet ready to buy.
Get fully pre-approved — not just pre-qualified — before shopping. Pre-approval is a real underwriting process. Sellers take it seriously; pre-qualification is just an estimate.
Keep total housing costs (mortgage + taxes + insurance + HOA) below 28–30% of gross income. Stretching beyond this limits your ability to build wealth in other ways.
Budget for closing costs. Expect to pay 2–5% of the purchase price in closing costs beyond the down payment. Factor this into your savings target.
Have your emergency fund intact after closing. Don't drain emergency savings for the down payment. Your first major home repair may happen within 90 days.
Don't buy at the top of your pre-approval amount. Banks pre-approve the maximum they're willing to lend — often far more than you should borrow. Buy based on your budget, not your borrowing capacity.