Everyone keeps telling me I need a house. It is a great time to buy a house. I should stop wasting my money on rent and go buy a house. The market is perfect for buying a house. I need a house.

It is true that now is a good time to buy a house, if you are ready. Purchasing a house can be a great blessing. However, it can also be a horrible curse if you are not financially ready. So the question becomes; when am I ready to buy and stop renting? Several things need to be in place before you run out and mortgage your life for a house.

First, make sure your “financial house” is in order. Are you debt free? I know this is a unique thought to have but trust me I speak from experience. You want to do this right and be able to really flourish and make your house a home.

Do you have an Emergency Fund of at least 3 months of expenses? If not, then you are not ready to buy. Yes, you may be able to buy a house and pay the same or maybe even less than you pay in rent. However, what this does not count the many other expenses that come with home ownership such as maintenance of the house, repairing or replacing the furnace or air conditioner when they break down (and they will), replacing the hot water heater when it dies. Do not try to kid yourself that you can save for these emergencies once you are in the house. The reality is “Murphy” will not wait for you to save up. He will come knocking and move in. If an Emergency Fund was not a priority before you moved, it surely will not be the top priority after you move.

Save for a down payment of at least 10%. I know your real estate agent and/or your mortgage broker have told you they can get you in for less than 10% down. Nevertheless, remember, they are selling you a house not looking out for your best interest. The reality is if you cannot save for the down payment, you are not in a financial position to own a house.

Are you prepared to pay the extra expenses such as property taxes, insurance, association dues, lawn care, and utilities?

Follow these steps and you will know if you are ready to start house hunting. If you do not think these steps are necessary, go ask one of the hundreds of thousands of homeowners who lost their home in the past 3-4 years.

When properly prepared, this is a great time to buy a house. However, if you realize that you are not as prepared as you originally thought, then step back, take a deep breath and relax. Let your “house fever” die down. Then focus and go out and prepare yourself properly. There will still be great homes available when you can truly afford them.