So, you want to buy a home, but how do you know you’re ready?

Being ready to buy a home is far more than a state of mind, it’s something that needs to be prepared for financially.

If you want to buy a house, there are several signs that you’re ready. The first is the most apparent, as you can’t even get a mortgage without this first milestone. The first step is making sure you have the 20% of the home’s value that you’ll need to make the down payment. If you’ve saved up that much money, according to Business Insider, the telltale signs you’re ready are a low income-to-debt ratio and knowing how much your new purchase will cost you on a monthly basis.

Buying a house is easy if you have the money to make the down payment ready, but sticking through the mortgage is a harder challenge. This is why knowing your monthly expenses in advance is a critical yet often overlooked aspect of being ready for home ownership. Your mortgage is going to become a constant constraint on your budget, so if you want to maintain a good quality of life, you should be ready to pay for your new utility bills, homeowners’ association fees, and other expenses. This is why if you’re already looking into your emergency fund to pay for the down payment, you’re staring down the wrong path. While it may feel easy to make rash decisions at first, your bank accounts will pay for it later if you don’t pre-determine the costs you’re ready to pay for.