Renting vs. Buying: How to Know If You're Ready to Buy a Home

By Tatum Folkestad · October 14, 2026

If you're renting right now, you've probably wondered whether it's time to buy. There's no single right answer, but there are a few clear signs that can help you decide if you're ready, or if renting a little longer makes more sense.

Compare the real monthly cost

A mortgage payment is more than just the loan. When you compare it to your rent, include:

• Principal and interest on the loan
• Property taxes and homeowners insurance
• HOA fees, if the community has them
• Mortgage insurance, if you put down less than 20% on a conventional loan or use an FHA loan
• A budget for repairs and upkeep, since there's no landlord to call

A lender can give you a real estimate for your situation, and it's free to ask.

Signs you might be ready to buy

• You plan to stay put for a while. Buying and selling both have costs, so owning usually makes the most sense if you'll stay several years.
• Your income is steady. Lenders look at your work history and how your monthly debts compare to your income.
• You have some savings. You'll want money for your down payment, closing costs and a cushion for surprises. Down payment assistance can help with the first two.
• Your credit is in decent shape. Many loan programs work with less-than-perfect credit, but a better score usually means a better rate.

Signs renting may be better for now

• You might move for work or school in the next year or two.
• You don't have any savings set aside for emergencies yet.
• You'd be stretching your budget to make the payment work.

Renting a little longer while you save and build credit is a smart move, not a step backward.

If you're not ready yet

While you're renting, make sure you're not overpaying. I offer lease audits where I review your lease and your rent and look for ways to save. That way you can keep more money in your pocket while you get ready to buy.