Many home buyers know to get prequalified for a mortgage before buying. But they often interpret that pre-qualification number as their budget, buying at the top of their price range.
If you’re not planning to buy a home for at least 10 months, consider CDs as a place to stash your down payment, as they offer higher interest rates with the tradeoff of having your money locked away for that term. I would not recommend putting your regular emergency fund in here, but it’s a great place for your down payment and removes the temptation of spending it elsewhere while waiting for the housing market to cool.
Remind yourself and your real estate agent that this is a one-time sale for them, but a long-term lifestyle choice for you. Build a relationship with a person who won’t pressure you but will respect your financial boundaries. The best agents I’ve worked with are the ones who still sent me listings and stayed in touch, even when I wasn’t ready just yet.
Buying a home isn’t a decision to take lightly. Delaying the purchase until you’re financially prepared can not only make this the biggest decision you’ll ever make, but also the wisest investment you can ever make into financial independence.