Do you want to buy a home in 2025? Unless you have unlimited resources and funds, you are going to be impacted by interest rates, high asking prices and more challenges. But that’s not really new now is it? Buyers understand the market comes with advantages and disadvantages. Right now, your biggest disadvantage is interest rates.
It is insane, the impact interest rates can have on your ability to buy a home or not. The mortgage on a $500,000 house today versus four years ago is insane. You are paying well over $1,000 a month more for the same home if you buy it today. That’s the reality you need to consider when buying, but that does not mean buying is a bad idea.
It Can Take Over A Year
Buying a house is still a smart investment, and if anything, the last two years have proven that. Interest rates are high, and people are still buying homes. Home prices are not going down and in some areas are still going up. Why would you not want to buy now knowing you’re going to get quality and know in a few years you may be able to refinance if you qualify.
While real estate needs to be treated like an investment, you still may just be looking for an affordable place to live. You want to buy a home and it does not matter where the market is, now is the right time for you to buy. That’s when you need to dedicate yourself to three things and be prepared to take some time on these. You need to work on your credit score, your income and your debt. Your credit score may take longer to address which is why it’s best to take early steps on it and your debt.
Get Out Of Debt
When you apply for your home loan, the lender will review your income-to-debt ratio. Yes, your income is important but your debt is just as important because it can make the difference on whether or not you can borrow enough money to get the house you want. Paying off major debt while also saving up for a down payment are very difficult to do at the same time.
Interest on credit card debt and car loans can cost you thousands of dollars a year. If you have major debt right now at a high interest rate and you are saving up for a house, consider paying that debt off faster. You will make up the difference quickly with fewer bills to pay each month and save on the interest as well.
Get Your Income Up
The reason debt is more important than income is because you can always get your income up by working more. Even $100 extra per week, on paper, adds up. House hunting should come after you are done job hunting and yes, second and third jobs are fine. It may seem like a lot to put on your plate but you want to have as much room in your approved loan budget to get the house that you want.
Once you get the house, all you have to focus on is maintaining it and paying your mortgage. Getting your income up at this time, along with having your debts paid off, will allow you to also save up more for the down payment. Every $5,000 down makes a dent on your loan and that’s why it’s worth saving.
Sit Down With A Realtor And Make A List
You are different from everyone else and that’s why it’s difficult to give you the best guidance. If you want to know how you can improve your chances of getting a home in 2025, sit down with a realtor and go over what you need to do to make those improvements, what areas you can focus on and more. That’s all the guidance you will need to get a jump start on your new plan. These areas will make you an ideal buyer to every lender around.
