Now that the new year is here, many of us review our goals for the year and life. If you or anyone you know has been thinking about buying a home for a while, this just might be the year to make it happen! 

Have you or anyone you know been wanting to buy a home but sat it out last year because of interest rates, lack of inventory, or maybe life just got in the way… this could be the year!

Many people put off buying a home because they thought rates would come back down to the sub-5% rates of the previous decade. Now it is clear that won’t be happening. The current rate environment will be here for a while. If you are thinking about (hoping to) buying a home this year, it’s important to make a plan well before you go to any open houses or fall in love with a home you find online.  

Getting started early in the year could help you end up with the home you want for a more affordable price and more favorable terms for you. 

Buying a home is a big deal and isn’t something that should happen overnight, so if you are thinking this might be the year to make your move, you’ll want to start planning and preparing early.   The best way to get started is to schedule a time to talk here. That way when “the one” pops up, we can make it yours in the most favorable way to you as possible. 

The First Step

If you’re a first-time buyer, the best first step is to become educated about the process of buying a home.  There is definitely a learning curve that everyone needs to go through in the beginning. I recommend you start with an educational meeting (pick your time here) to talk about what’s involved in buying a home and signing up for my 13-week series – Home Buying 101 which explains all the steps in more detail.

If it’s your second or third time around, you likely also need to sell as well, which means juggling buying and selling at the same time so you don’t end up with two homes or no home.  Since there is so much involved with buying and selling at the same time, planning things out well before you want to move is a must.  You might like my “Love Selling Your House” series.  And, again, understanding the process and what needs to happen when is the best first step.  

After understanding the high-level overview of what happens when, the next steps are:

Learn about current mortgage loan options.  There are so many loan options out there and now is the time to see what is available.  I can recommend reputable lenders who have loan programs perfectly suited to your financial situation and goals.  These days, getting a mortgage is not a “one-sized fits all” thing.  The right lender and mortgage program really depends on your particular situation, how long you are going to own the home and other factors as well.

The most important part of the mortgage piece, though, is truly understanding how your desired monthly payment and downpayment equates into the right purchase price for you.  Even the most savvy people don’t understand how the math works, but you should before you start looking at homes.

Find out about assistance programs for buyers. Did you know that there are assistance programs that can make buying a home much more affordable? You’ll be amazed to see what is available for mid-income buyers, first-time buyers, veterans, city or state employees, etc. Programs from local housing authorities can help with down payment or low interest loans; and many buyers can qualify for this assistance.  Understanding what loans you might qualify is a huge step to making your home affordable.  I can introduce you to what the options are and help you determine whether any of them are right for you. 

Get to know the market.  After you understand the numbers, the next step is to learn what you get for your money in various neighborhoods. If you check things out (even virtually) you’ll start to see what you get in a price range in each neighborhood. This will help you narrow down the location(s) and features that are important to you. That way you’ll be more efficient when you actually house hunt and are ready to buy. With condos, you’ll also get an idea of monthly HOA fees and amenities in different buildings.

Strengthen your credit score and build credit history. Your FICO credit score is your gateway to a good mortgage since lenders use it to determine your risk as a borrower. So the higher your score, the better your loan options. And, if you’re a couple, then BOTH of you will need to work on your credit!

Right now lenders are looking at a score in the higher 700s for most loan products. Some government loans, such as FHA loans, will consider lower scores. 

It can take 6 months or more to improve your score, so start today. Pay your bills on time, don’t buy anything expensive on credit (i.e. cars, appliances, vacation), and double check your score for inaccuracies.

Know what monthly mortgage payment you can afford. What a lender says you CAN afford can be very different in what you are willing to spend each month. Determine what the monthly payment should be. No one wants to be stretched too much and become “house poor”.

Save for a down payment. Cut expenses and save, save, save right now! No matter if you get a 3% down loan or a conventional 20% down loan, lenders still want to see if you have enough cash reserves in the bank. Remember, owning a home isn’t only its purchase price, but it includes other costs such as taxes, insurance, maintenance, and possible HOA fees. With a larger savings account, a lender knows you’re financially responsible and less of a risk.

As you can see, it’s important to start planning early if you want to buy a home this year. That way you can be ready for “the one” when it comes up.  I’m here to help you make it possible.  If you are ready to get started, our first step is to schedule a meeting to talk through the steps and create a specific plan for you.  You can schedule a time here.

I wish you a happy and prosperous 2025!