According to a report in 2018, less than one percent of Filipinos are considered “ultrarich”. Unless you’re part of that tiny percentage, buying a home is a life-changing decision. And as much as it’s a financial commitment, you have to be just as emotionally equipped for the process.

If you’re considering it but aren’t sure if you’re ready to take the leap, this checklist is a good place to start:

How’s Your Credit Score?

You might be asking: how do I know my credit score? This isn’t something a lot of people think about when considering their odds at home buying. But now that you’re a prospective buyer, there’s never been a better time to know your credit score. The higher the score, the better the interest rate on your mortgage, the lower the monthly payments. If your current standing isn’t exactly stellar, it’d serve you better to put off purchasing for now then work to build up your credit.

Are You Debt-free?

Owing money to someone happens to the best of us. But as an interested home buyer, now is the time to be free of debt and better yet, have a bonus emergency fund. Buying a home isn’t a cheap pursuit, let alone owning one. You want to be prepared for any unexpected expenses that may come your way, like a leaky roof or a broken sink. Having unpaid debt, for whatever reason, doesn’t put you in the best position to be a homeowner — for now at least. Our advice? Make sure you’ve paid off all your debts before seriously scouring the property market.

Are You Doing It As an Investment?

If your reason for buying a house is because you think it’s a good investment, chances are you’re not equipped to handle the responsibilities that come with homeownership. The truth is, there’s not much increase in the average home price over the years. Factor in inflation, and you’re not really making a lot of money on your home. To make the most of what you pay for, your criteria for the ideal home should go beyond any monetary goal. Safe neighborhood, accessible location, appropriate size for your family. Treat your home for what it is: a utility, not an investment.

Are You Earning Enough?

As a rule of thumb, you shouldn’t be directing more than one-third of your take-home pay towards mortgage. Any more than 30% means money is going to be tight on a month-to-month basis, leaving you vulnerable to emergency expenses and unexpected costs. You have two options: get a higher-paying job to pursue the house you want or aim for a housing deal that won’t eat up more than 30% of your current income.

Can You Afford the 20% Down payment?

Do you have at least the 20% down payment ready? If not, you might want to tread lightly. The less money you can put down, the higher your mortgage payment. Inversely, the more money you can direct towards the initial purchase, the lower your monthly payments. Establishing the downpayment is a critical step, because the right deal can spell the difference between hundreds of thousands lost or hundreds of thousands gained over the life of the loan.

Buying a home is a mentally and financially exhaustive pursuit that you can’t afford to chase on a whim. At the very least, make sure you’ve thoroughly assessed your readiness level with the checklist above before taking the next step forward.