in our free newsletter.

Thousands benefit from our email every week.

1. If you’ve got good credit

Your credit score should be high enough to qualify you for a good rate on a mortgage.

Your score ranges from 300 to 850. It’s like a grade that tells banks and credit card companies how well you manage money and repay debt. The better your score, the better deal you’ll get on a mortgage, potentially saving you tens of thousands of dollars over time.

Generally speaking, a score of 750 to 850 is considered “excellent,” 700-749 is considered “good,” 650-699 is “fair” and 300-649 is considered “poor.”

A free online tool like Credit Sesame can quickly show you your credit score — and suggest ways you can improve it. It takes just 90 seconds to sign up.

Compare current mortgage rates from top national lenders. Get the best rate for your purchase or mortgage refinance.

Compare Rates

2. If you’ve got a down payment saved up

A down payment is the amount of money you pay upfront for your home — the money you’re putting down. For example, if you wanted to put 10% down on a $200,000 home, your down payment would be $20,000.

The more you’re able to put toward a down payment, the lower your monthly mortgage rates will be — and the less you’ll pay in interest over time.

According to the National Association of Realtors, the average down payment for first-time buyers these days is about 6% of the home price.

But if you’re able to put down 20%, you can skip making monthly payments for private mortgage insurance — an additional expense that typically costs between 0.5% and 1% of the total value of your mortgage.

And buying a home isn’t just about the down payment. You’ve also got to consider the closing costs, property taxes, potential HOA fees and maintenance needs, to name a few. Be sure your budget is ready.

3. If your job is secure

Only you know how secure your job is. In this ongoing pandemic/recession/economic minefield, there are a lot of unknowns.

But you don’t want to put yourself in a position where you might default on your mortgage. That could make it significantly harder to buy a home again, if you want to try again in the future.

Buying a home is a big step. In the big picture, this is a good time to do it because of historically low mortgage rates — but you want to make sure you’re ready for it.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Secure your retirement with a reverse mortgage

If you’re low on cash savings and investments but have wealth in your home, a reverse mortgage is a great option for covering retirement expenses.

Mutual of Omaha is a trusted insurance provider that helps you make the most of your home equity.

About the Author

The Penny Hoarder

The Penny Hoarder

Guest Writer

Founded in 2010, The Penny Hoarder is one of the nation’s largest personal finance websites. Its purpose is to help people take control of their personal finances and make smart money decisions by sharing actionable articles and resources on how to earn, save and manage money.

What to Read Next


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.