What To Do NOW If You Want To Buy A Home In 2025
During the last half of the year, the real estate market typically starts to slow down a bit thanks to the holidays, but come January, we historically start to see things pick back up.
Those who have been wanting to sell see the new year as the perfect opportunity to start the process and those who have been waiting to buy are finally ready to make a move as one of their first new year goals.
Since many people tend to think this way, it’s important that you’re fully prepared so that you can successfully act when the time is right in the new year.
Buying a home isn’t just one of those things that you decide to do one day and then BAM! Homeowner.
There’s a lot of steps that need to happen before you can start the house hunting process, so if buying a new home is on your goal list for 2025, this blog post will serve as your guide for what you can be doing NOW to make that goal a reality much faster!
The Steps To Take NOW So You Can Successfully Buy a Home In 2025
Assess your current financial situation
If you know you want to buy a home in 2025, taking the time to assess your current financial situation now is a good idea! Your financial health is truly the foundation of your home-buying journey, so start by taking a good look at your income, savings, and any existing debt.
During this time, analyze your current income and make sure it's stable! Consistent earnings over time make lenders more confident about approving your mortgage application.
Additionally, take a look at your credit score – this significantly affects the loan terms you’ll qualify for, including interest rates. If your score could use a boost, focus on paying down debts, correcting errors on your credit report, and avoiding new credit inquiries.
It’s also smart to pay attention to your savings and get a game plan for your down payment.
Depending on your loan type, you’ll need anywhere from 3% to 20% of the home’s purchase price for a down payment, plus closing closets.
BUT DON’T WORRY! You don’t have to figure out all of these numbers alone. Your mortgage lender (which we’ll talk about in just a second) can help you understand exactly how much you’ll need for your specific situation.
Right now, it’s simply a good idea to start thinking about your savings and make sure you have some sort of plan in place so that it’s not a struggle later.
Lastly, it’s important to consider your debt-to-income ratio (DTI). This is a measure of how much of your monthly income goes toward debt payments. Lenders typically prefer a DTI below 43%, so if you currently have more than that, it’s wise to start reducing credit card balances or paying off loans.
Identify the location or area that you ideally want to buy in
One of the most exciting parts of planning for homeownership is deciding where you want to live. If you know you want to buy, you’ve likely already started thinking about this quite a bit, but it can still be valuable to research and narrow down your options to a few key areas so that the actual house hunting process is easier!
When you’re trying to decide where you want to live, make sure you think about:
✔️ Proximity to Work and Schools – consider your daily commute and access to quality schools if you have or plan to have children.
✔️ Neighborhood Amenities – do you want to be close to parks, restaurants, or shopping centers? Make sure that you look for areas that align with your desired lifestyle!
✔️ Affordability – compare average home prices and property taxes in different areas to ensure that the area you choose aligns with what you’re willing or able to pay
If you’re moving to or within Billings and aren’t sure which neighborhood is the best fit for you, the Ultimate Community Guide will be your bestie!
CLICK HERE to download the guide for free and learn all about the 8 different communities within Billings along with a rundown of what it’s like to live in the area, the amenities nearby, the school district, average home pricing, and more!
Make a list of your preferred home wants and needs
In the midst of deciding where you want to live, it’s also important to start making a list of your preferred home wants and needs.
How many bedrooms and bathrooms are a MUST?
Is a backyard a deal breaker?
Single-family home, condo, or townhouse?
Preferred location?
Features and amenities?
These are all questions that your real estate agent will ask when you meet for your buyer’s consultation, so getting a head start on this list can be super helpful!
Connect with a trusted real estate agent in your local area
Speaking of meeting with a trusted real estate agent, it’s always better to connect with an agent sooner rather than later when you know you want to buy.
Even if you don’t plan to buy for a few months, it’s smart to get the conversation started early so that they can help make sure you have everything you need to make the process as smooth as possible from the very beginning.
When looking for a real estate agent to work with, it’s important that you choose someone that’s familiar with the area you’re looking to buy in and someone who has experience in the industry so they can help you navigate the process with ease.
A few questions to ask when you first meet with a realtor to make sure they’re a good fit include:
How long have you been a realtor and how long have you served [INSERT AREA]?
Are you available to show properties and attend meetings during evenings and weekends? (This is SUPER important to understand, especially if you have a work schedule that doesn’t allow for much flexibility!)
What are the current market conditions in the area I'm interested in?
Can you provide insights into trends and forecasts for the local real estate market?
How familiar are you with the neighborhoods I'm considering?
How do you approach negotiations to ensure the best deal for your clients?
How do you handle multiple offers for your clients?
Do you have any professional referrals, such as mortgage brokers or home inspectors, you recommend?
What is your commission structure, and how do your fees work?
Do you work as part of a real estate team, and if so, who will be my primary point of contact?
How do you handle multiple clients and ensure personalized attention?
You can pick and choose which of these questions apply to you the most, but if I could give you any advice it would be to ASK. THE. QUESTIONS.
If you’re planning to buy in Billings, hello hi – I’d love to meet ya. 👋
Work with a lender to get pre-approved
Once you’ve chosen a realtor to work with in your area, the next professional that you’ll want to get connected with is a mortgage lender that can help you get pre-approved.
Your pre-approval is essentially your golden ticket for actually being taken seriously as a buyer in the market.
If you aren’t sure which lender to choose, your agent will likely have multiple recommendations that they prefer to work with so you don’t have to navigate this on your own.
When you get connected with a trusted lender in your area, they will work with you to assess your financial situation and determine your eligibility for a mortgage by gathering your income information, credit history, assets and debts.
Once they have all of this information, they can issue a pre-approval letter to you as a borrower, which states the maximum loan amount that you qualify for.
During this process, they will also help you determine which loan programs you qualify for and which ones will be the best fit for you!
In addition to pre-approvals and loan options, your lender is also the person who will provide all of the information about current interest rates and help you choose between a fixed or variable rate option.
They will also be who determines the specific interest rate for your loan based on factors like credit score, down payment, and the market's prevailing rates.
Getting pre-approved is the ULTIMATE first step before you can really get the house hunting process started and to make it happen, you’ll need to gather a few documents – here’s a quick list of everything you’ll need in case you want start gathering these things early:
Personal Identification, such as a driver's license, ID Card, a government issued card w/ photo, etc.
Social Security Card/Number
Pay Stubs
Bank Statements
Tax Documents, including W-2’s, tax returns, and other tax related documents
Investment Account Statements, including 401k, stocks, bonds, investment accounts, etc.
List of Monthly Debts, including your “fixed debts,” such as rent or mortgage payments, car loans, student loans, credit cards, personal loans, medical bills, etc.
Rental Information and Landlord Reference (if you’re currently renting)
Gift Letters (if you are receiving funds from an outside source)
If you’re self-employed or if you already own a home, your lender will likely ask for a few additional documents – click here for a more in depth breakdown of those scenarios!
Ready To Start The Home Buying Process?
Overall, getting a head start on these things NOW can set you up for huge home buying success in 2025!
While the process of buying a home can feel intense and overwhelming, it’s a whole lot easier when you’re clear and organized from the very beginning.
PLUS when you have trusted professionals on your side, it really can be a breeze.
So, whaddya say – is 2025 your home buying year?
If you’re local to Billings, CLICK HERE to get started and I’ll help you get started on the right foot!
And if you aren’t local to Billings, good news for you – I know people! Connect here and I’ll get you in touch with a trusted agent in your area to start the home buying process with ease!