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15 Money Moves To Make Right Now if You Want To Buy a Home in 2025

Prepare your finances for homeownership with savvy financial choices.

By Sarah Sharkey

Edited by Lauren Wellbank

Updated Jan. 18, 2025

If you want to buy a house, it’s never too early or too late to start making improvements to your financial situation. For those looking to make a purchase in 2025, there are some things you can do right now that will help set the stage for a smoother journey as you complete all the tasks that must be done.

We explore the most important money moves to make if you are planning to buy a house this year.

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Check your credit

Start by checking your credit report. You can get a free copy of your credit report by visiting annualcreditreport.com. Another option is to sign up for an account with a credit reporting agency to review the relevant information.

As you look through your credit report, look for any debts that you didn’t know about and potential signs of fraud. If you spot a mistake on your credit report, reach out to the credit bureaus to have it removed as soon as possible.

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Open a high-yield savings account

Purchasing a home involves an upfront outlay of cash, which means you’ll need to save up in advance of your home purchase. If possible, open a high-yield savings account to make the most of your savings.

A high-yield savings account will help your funds earn interest, which can give you some extra help as you work toward your savings goal.

Work to improve your credit score

Regardless of where you are starting from, it’s often a good idea to beef up your credit score in the months leading up to a home purchase.

If you have a minimal credit history, you might need to sign up for a secured card or credit builder loan to kickstart your credit. If you are further along, improving your credit score might include paying down debt and avoiding new credit accounts until your home purchase.

Wherever you are in the journey, sticking to on-time payments to your credit accounts offers the best way to improve your score over the long-term.

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Assess your expenses

Before you take on a major financial obligation, like a home purchase, it’s a good idea to understand where your finances currently stand. One way to do that is by tracking your expenses and comparing the total against your income.

You might find that you are spending well within your means. Or you might realize that you need to clean up your spending before committing to a mortgage.

Trim up your budget

If you’ve started to track your expenses, you’ll likely discover some missed opportunities in your budget. For example, you might be paying for a subscription you don’t use or spending too much on eating out.

Once you’ve spotted an area of overspending, make the effort to rein it in. You can redirect these funds toward your other financial goals.

Make headway on paying down debts

For potential homebuyers with substantial debts, carrying too much debt into your home purchase could backfire. Many lenders look at your debt-to-income (DTI) ratio when determining how much to lend you. If you have too much debt, this could negatively impact your ability to purchase a home.

One solution is to make paying down your debt a top priority.

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Research home prices

As you polish up your finances, it’s important to research home prices. Start by looking in the area you have in mind.

But don’t be afraid to widen your search radius to find homes that seem reasonable for your situation. At this stage, driving around different neighborhoods can help you get an idea of where you’d like to live.

Monitor interest rates

Market interest rates rise and fall due to market factors outside of an individual’s control. While it’s ideal to avoid trying to time the market and wait for a lower interest rate to roll around, it’s still helpful to keep your eye on where interest rates stand.

Mortgage rates have a big impact on your total mortgage costs, which makes them an important factor in your search.

Understand the hidden costs of homeownership

As you get familiar with the houses in your area, it’s critical to get familiar with the hidden costs of homeownership as well.

Although it’s tempting to believe that your mortgage payment is the most you’ll pay, that’s usually not the reality. You’ll also have utility bills, repair costs, maintenance expenses, and more to add to your homeownership costs.

There’s nothing inherently wrong with having hidden costs baked into your home purchase. But it’s important to get familiar with what to expect so that you aren’t caught by surprise after closing.

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Evaluate needs versus wants

When it comes to buying a home, it’s tempting to find one that suits all of your wants. But, generally, a home with all the perks comes with a much higher price tag. As you start working towards your goal of homeowners, get serious about separating your needs from your wants.

For example, you need a kitchen, but you might not necessarily need a top of the line kitchen fit for a chef. Getting clear on what are non-negotiables for your home purchase can make for a smoother home search.

Set a realistic house purchase budget

With a clearer idea of interest rates and home prices, take a look at what you can reasonably afford. Generally, experts recommend that your housing costs not exceed 28% of your gross monthly income.

For example, if you earn $5,000 in gross income per month, your housing costs generally shouldn’t be higher than $1,400.

Set a down payment savings goal

The size of your down payment has a big impact on your monthly mortgage costs. Of course, a higher down payment tends to lead to a lower monthly payment, since you’ll need to borrow less money.

Play around with the numbers to determine how much you’ll need to put down on a house to keep your monthly costs manageable. Using an online mortgage calculator can help you play with the numbers to find a sweet spot for your budget.

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Get pre-approved

When you feel ready to start house shopping, it’s time to get preapproved for a mortgage. At this stage, you should have a fairly good idea of what you are willing to spend on a home purchase.

However, a preapproval will give you a better idea of what a lender is willing to lend you in order to finalize your home purchase, and in some cases, that means you’ll need to consider more affordable houses.

But in other cases, you might get preapproved for much more than you anticipated. Instead of opting to spend more, try to stick with your original plans for an affordable home purchase.

Find a buyer’s agent

With a preapproval in hand, you can seek out a buyer’s agent to help you shop for homes. The right buyer’s agent can make a big difference, especially if you are trying to find a home with specific features or a specific price point.

Save aggressively

With a down payment in mind, the lead up to your home purchase is usually a good idea to save aggressively. In order to ramp up your savings, you might opt to slash discretionary spending or potentially find a side hustle to get you to your goal.

Bottom line

Taking the right steps in the lead up to your home purchase can make all the difference, not only in how much buying a new home will cost you, but how stressful the process will be. Additionally, getting a jump start on preparing to buy a home can also help ensure that you can realize your 2025 dream of homeownership sooner rather than later.

After closing, don’t be afraid to seek out clever ways to help pay for your mortgage. Because, even though you may think that you’ve thought of everything during the process leading up to purchasing your home, it never hurts to have a little extra money coming in to pay for those unexpected expenses.

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