Tired of throwing away your money on rent? Outgrown your current home? It is time to buy a new home. Before you say that you can’t afford it or you don’t have the time, take a minute to read this– a step-by-step plan for you to be in a new home by the end of 2025.
According to the National Association of REALTORS®, 2025 is looking like a great year to buy a new home. Employment is up, interest rates are stabilizing, and the uncertainty of the election is behind us. What is stopping you?
All signs are pointing to this being the year you make your move. Buying a new home can seem like a dream that is out of reach, but it is not. This plan (with links and helpful resources!) will help you understand the process, set your goals, and get on the move.
Days 1- 150: Get Your Ducks in a Row
In the first five months, you need to understand your current financial position and make a plan. Full disclosure– this is not the fun part of the process. But these steps are essential for you to understand where you are and make deliberate progress to where you are going. This work will pay off when you apply for a mortgage later on.
- Optimize your credit score:
A higher credit score means better mortgage rates. Depending on the type of mortgage you get mortgage companies could require anything from 500 to 700+. You can get a free credit report at AnnualCreditReport.com. You want to correct any mistakes, settle any forgotten debt, and work on improving your score by paying down debt.
- Create a budget and savings plan:
Establish a realistic savings goal for your down payment (usually 10-20% of the home price) and additional costs like closing fees, inspection fees, and moving expenses. Use a budgeting tool like Mint or YNAB to track your progress.
- Reduce your debt-to-income (DTI) ratio:
Lenders generally prefer a DTI ratio around 36%. If yours is higher, focus on paying down your high-interest debts. You can calculate your ratio using this DTI calculator.
- Set your new home budget:
Once you understand your financial position, you can decide how much you can realistically spend on your new home. If you are selling a home, you can estimate how much equity you will get out of your current home to roll over into the down payment. This calculator can help you get a clear picture of what you can afford and also what you can expect your down payment and monthly payment to be.
- Explore mortgage options:
Research different types of mortgages, including fixed-rate and adjustable-rate loans, and compare lenders. Use platforms like LendingTree and Bankrate to compare interest rates and terms.
- Create a file for all of your documentation:
When you apply for a mortgage you will need documentation including W-2 forms (last 2 years), pay stubs (last 30 days), bank statements (last 2 months), tax returns (last 2 years), and proof of assets (e.g., investment statements). Start this file now and add to it as needed so you will be ready with all your documentation.
Days 151-180: Define Your Must-Haves
Once your finances are in order, it’s time to focus on finding the right place to call home. Beyond the home itself, the community you choose will have a significant impact on your lifestyle and long-term satisfaction.
- Pinpoint exactly what you want:
One of the most important things that you can do is to decide what features in your new home are wants, needs, and must-haves. This will help you immensely during your search and give you a reference to compare the homes that you see. Think of it as a time-saving tool to help you focus on only viewing homes that meet your must-haves. Use a checklist like this to set your priorities before you start looking at homes.
- Decide if you want to use a Realtor:
There are pros and cons to using a Realtor, but if you decide to now is the time to do your research. Ask friends, talk to Realtors with listings in neighborhoods you like, and check online reviews to select a few agents to interview. Share your list of must-haves and budget and get their insight on how to conduct your search.
- Explore neighborhoods:
Drive or walk around the neighborhoods you’re considering. Look for signs of well-maintained properties, nearby amenities, and the general atmosphere of the area.
- Research schools and amenities:
Even if you don’t have kids, homes near good schools tend to have higher resale values. Use resources like GreatSchools to evaluate local schools and check for proximity to grocery stores, parks, and public transit.
- Check safety and crime rates:
Use websites like NeighborhoodScout or local government sites to research crime rates and overall safety.
- Talk to locals:
Engaging with current residents can give you insights into the neighborhood that you won’t find online. Ask about traffic, neighborhood highlights, and any community events or issues.
Days 181-210: Start Your Home Search
With a clear idea of your preferred neighborhoods, start visiting homes that fit your criteria. Either tour with your Realtor or browse available homes on sites like Zillow and Redfin and schedule showings directly with the listing agents. 
- Create a comparison checklist:
Take notes and photos of each property you visit. Use your must-have list as a checklist for each property. Take note of important (and expensive) details like the condition of the roof, HVAC system, and appliances. These details will also help if decide to make an offer and need to negotiate later.
- Keep your budget in mind:
It’s easy to fall in love with a home that’s slightly out of your price range. Stay disciplined and avoid stretching your budget too much.
Days 211-240: Make an Offer
Once you find the perfect home, it’s time to make an offer. This can be a nerve-wracking time, so be prepared. In a seller’s market with low inventory, it is not unusual for multiple rounds of counter offers.
- Do a market analysis:
Compare the asking price to recent sales of similar homes in the area to determine a fair offer. Online tools like Realtor.com provide data on recent home sales.
- Include contingencies:
Common contingencies include a satisfactory home inspection, appraisal, and financing approval. If you have a house to sell, include that as a contingency. These protect you if issues arise after your offer is accepted.
- Negotiate terms:
Be prepared for counteroffers from the seller. Stay firm on your budget and work with the seller to reach an agreement on things like closing date and included appliances. If the terms cannot be worked out to your satisfaction, walk away.
Days 241-300: Due Diligence
Before finalizing your purchase, you’ll need to conduct due diligence to ensure that your investment is sound.
- Get a home inspection:
Hire a licensed home inspector from the American Society of Home Inspectors to check for structural issues, plumbing and electrical problems, and pest infestations.
- Review the inspection report:
If significant issues are found, negotiate repairs or request a price reduction. Be prepared to walk away if the seller isn’t willing to address major concerns.
- Confirm zoning and property restrictions:
Ensure the property is zoned for your intended use (e.g., home office or future expansions). Local government websites typically provide zoning information.
Days 301-330 Finalize Your Mortgage
With due diligence complete, it’s time to wrap up your financing. 
- Lock in your interest rate:
If you haven’t already, lock in your rate to protect yourself from fluctuations in the market.
- Complete the underwriting process:
Be responsive to your lender’s requests for additional documentation to avoid delays.
- Review the closing disclosure:
This document outlines all final costs, including loan terms, interest rate, monthly payments, and closing fees. Ensure everything matches your expectations before proceeding.
Days 331- 365: Close the Deal and Move In
This is the final step—congratulations, you’re about to own your dream home!
- Attend the closing meeting:
Bring a valid ID, proof of insurance, and a cashier’s check for closing costs. Once you sign all the necessary paperwork, you’ll officially own your new home.
- Receive the keys and move in:
Schedule movers or enlist friends and family to help. Set up utilities and internet service ahead of time for a seamless transition.
- Celebrate your new home:
Take time to unpack, settle in, and make your space your own. Enjoy your new life and take pride in the work you put in to get here.
Buying a home requires planning, patience, and preparation, but it is within your reach. By following this guide, you’ll be well-prepared to close on your dream home by the end of 2025!
