Are you financially ready to own a home?

Our financial expert Dave Ramsey thinks you should be  financially ready for your own home.

I bring home about $30,000 a year, we're debt-free and my wife is a full-time mom.

We live in a 2,000 square foot apartment in a small town with a toddler, and another baby is on the way. We're due in April, and we're trying to decide whether to move now using a no down payment loan, or wait until six months after the baby's born.

We're worried about being cramped, plus we've always wanted our own place.

-- Knox

Dave says: You've got 2,000 square feet and only three -- soon to be four -- people under the roof? You're not cramped, that's plenty of space. Especially when two of them are tiny!

I want you to own your own home someday. It's a great feeling to have a place you can honestly call your own. But you've got to make sure you're ready financially for that kind of commitment. The best way to start the ball rolling is by saving for a big down payment.  

With no debt, you should be able to save up for a 20 percent down payment,  or more, in no time. If you do this you'll reduce the amount of your mortgage, plus you'll avoid having to pay private mortgage insurance.

Also, make sure that your monthly house payment will be no more than 25 per cent of your take-home pay. In your case, that would be about USD 750 a month.

A little about Dave:
 
At 26, he had a net worth of a little over a million dollars. Life couldn't be more perfect. And then he lost it all, thanks to debt. That's when Dave went on a quest to find out how money really works, how he could get control of it, and how he could have confidence in handling it. On our pages, Dave will guide readers on all things related to money!

For more financial advice plus a special offer for our readers, visit www.davesays.org. This column is part of a series of columns by Dave, exclusively for you, dear readers!

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