Your Mortgage Blog

Posted on
January 1, 2025
by
Neena Vlamis

The start of a new year is the perfect time to set goals and map out plans for the future. If purchasing a home is on your list for 2025, financial planning is key to turning that dream into a reality. Here are actionable steps to help you prepare for homeownership this year:

1. Assess Your Financial Health

Before diving into the home-buying process, take a clear-eyed look at your finances:

  • Credit Score Check: Your credit score significantly impacts your mortgage eligibility and interest rate. Obtain a free credit report and address any inaccuracies or areas needing improvement.
  • Debt-to-Income Ratio: Lenders evaluate how much of your income goes toward debt payments. Aim to keep this ratio below 43%.
  • Savings: Assess your savings for a down payment, closing costs, and an emergency fund. Typically, a down payment ranges from 3% to 20% of the home price, depending on the loan type.

2. Set a Realistic Budget

Understand how much house you can afford by factoring in:

  • Your monthly income and expenses.
  • Property taxes, homeowners insurance, and potential HOA fees.
  • Future maintenance costs. Use an online mortgage calculator to estimate monthly payments and determine a comfortable range.

One of the perks of working with us at A and N is we love helping our clients plan their budget! Together, we can work on numbers to find you a monthly payment you are comfortable with. From there we are able to give you a price range of homes to fit your specific budget.  

3. Establish a Savings Plan

If you need to build your down payment or cover other costs, set up a dedicated savings plan:

  • Automate Savings: Set up automatic transfers to a separate account for your home fund.
  • Cut Unnecessary Expenses: Review your budget to identify areas where you can save.
  • Boost Income: Consider side gigs or freelance work to accelerate your savings.

4. Understand Your Loan Options

Different mortgage programs cater to various needs. Research options such as:

  • FHA Loans: Ideal for first-time buyers with lower down payment requirements.
  • Conventional Loans: For buyers with strong credit and a higher down payment.
  • VA Loans: Available to veterans and active-duty military members with no down payment required. A mortgage advisor can guide you to the best fit for your situation.

5. Get Pre-Approved

A mortgage pre-approval letter shows sellers that you’re a serious buyer and clarifies your budget. Gather necessary documents like pay stubs, tax returns, and bank statements to streamline the process.

6. Work with Trusted Professionals

Purchasing a home is a team effort. Assemble a group of experienced professionals, including:

  • Real Estate Agent: To help you find and negotiate the right property.
  • Mortgage Advisor: To guide you through financing options and secure the best terms.
  • Home Inspector: To ensure your future home is a sound investment.

If you’re looking for a strong team, we work with the best in the industry and would love to connect you with someone.

7. Stay Flexible and Patient

The real estate market can be competitive. Stay open-minded, and be prepared to adjust your plans as you search for the perfect home.

Start Your Journey Today

Buying a home is one of the most significant financial decisions you’ll make, and preparation is the key to success. By taking these steps, you’ll be well on your way to achieving your goal of homeownership in 2025.

Need guidance? A and N is here to help you every step of the way. Let’s make this the year you find your dream home!

Get Pre-Approved Fast!

Welcome to a better mortgage experience! In just few minutes you can find out what you qualify for and explore multiple loan options and interest rates.

Complete our short and intuitive pre-approval interview to get started.

More of Our Latest Blogs