Buyers, Here's Your Guide to Make Your Homeownership Dream Alive in 2025 [PART 2]

Planning to buy a home in 2025? With only a few days left ‘til the new year, it may seem like an extremely distant and daunting goal. But the good news is that you still have the whole year ahead of you, which means you can take it step by step. Getting started today is already a huge feat, so here's a comprehensive guide that you can use to navigate through this journey toward your homeownership dreams.

 

 

 

Building up your savings is a fundamental part of your home-buying journey. Whether you're purchasing next year or in the next few years, you’ll need funds for things like down payment, closing costs, maintenance costs, and even moving expenses. Once you’re done evaluating your finances, create a plan to save up for what you need.

 

Create a dedicated savings account and automate savings. Having a separate savings account can help you stay organized and focused. You can track your progress and won’t be tempted to use your funds for other expenses. Consider setting up a high-yield savings account or a money market account to earn interest on your savings.

 

Set a down payment goal. Before you can take out a mortgage, you’ll have to put down some of the cost upfront since a bank won’t loan you the full purchase price. This is why the down payment is often the biggest hurdle for many first-time home buyers.

 

Consider ways to increase your income. You might want to look for opportunities to make more money that you can put directly into your house fund. It could be asking for a raise at your company, moving into a new role with a better income, or picking up part-time jobs, freelance opportunities, consulting jobs, or side gigs that align with your skills and interests. And if you happen to have some tax refund or bonus at work, use the money to boost your savings and reach your goals faster.

 

 

Homeownership comes with a lot of expected and unexpected expenses that many first-time home buyers may not fully anticipate. When setting a realistic monthly budget for a home, here are some things to include:

 

• Down payment
• Closing fees and other legal costs. Typically range from 2-5% of the property's purchase price and include attorney fees, title fees, inspection, and appraisal fees.

• Monthly mortgage payments, recommended to keep at or below 25% of after-tax income
• Home insurance
• Property taxes
• Homeowners association fees, if applicable
• Utilities
• Regular maintenance, such as lawn/yard care and seasonal upkeep
• Unexpected repairs, such as broken appliances, damaged windows, etc.

 

No matter how exciting, buying your first home is a complicated undertaking. Building a team of knowledgeable and reliable professionals can make all the difference. Here are some of the people you need in your corner to help you streamline the process and avoid unpleasant surprises down the road.

 

Working with a local and experienced real estate agent can make the home-buying process less daunting. They can provide valuable insights into the housing market, share information about your target neighborhoods, negotiate deals on your behalf, and guide you through the complex paperwork.

 

Connecting with a trusted mortgage advisor will help you understand your financing options and give you a clear understanding of your buying power. A pre-approval letter from your lender also provides you with a clear estimate of how much you can borrow and shows that you're a serious buyer.

 

Hiring an inspector who will thoroughly inspect the property’s condition will make sure that you can protect yourself from hefty expenses caused by unseen major repairs. Inspection results can help you negotiate with the seller to cover costs, lower the purchase price, or walk away if serious structural problems are found.

 

Other professionals that you may need include a financial advisor, a home appraiser, and a real estate attorney who can review documents and agreements for your peace of mind.

 

 

Finally, remember that any significant milestone in your life requires time and patience, including your journey to homeownership. Set realistic expectations while staying committed to your goals. Be prepared for the ups and downs, especially in competitive markets where bidding wars are common.