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. Here are some things you can do:

• 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. Your down will be a percentage of the total purchase price, and it’s typically paid in cash at the closing of the transaction. There are multiple factors to consider when deciding how much to save for a down payment, such as your price range for the home and the programs you qualify for.

• 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.

Saving up for a house can be pretty intimidating, but it doesn’t mean sacrificing everything fun in your life. With a combination of strategy, discipline, and smart financial planning, it isn’t impossible to reach your savings goal that will help achieve your homeownership dreams.

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:

Before the home purchase:

• Down payment

• Closing fees and other legal costs. Which typically range from 2-5% of the property's purchase price. Closing costs usually include attorney fees, title fees, as well as inspection and appraisal fees.

After the home purchase:

• Monthly mortgage payments, which is recommended to keep at or below 25% of your after-tax income to stay on solid financial ground.

• 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. Would you want to risk your hard-earned money and your sanity going through the process alone? 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.

• Real estate agent

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. Look for an agent who knows your preferred areas inside and out, understands your needs and unique circumstances, and has a solid track record of helping first-time buyers in your price range. 

• Mortgage lender

Connecting with a trusted mortgage advisor will help you understand your financing options and give you a clear understanding of your buying power. Your lender will also help you track the best mortgage rate trends and explore tools to keep your mortgage payments manageable. 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.

• Home inspector

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. They can easily uncover any hidden issues related to structure, electrical, or plumbing. The inspection results can help you and your realtor negotiate with the seller to either cover the costs of repairs, lower the home’s purchase price, or simply walk away from the transaction if the home is found to have some serious structural problems.

Other professionals that you may need in your team include: a financial advisor who will ensure you’re prepared for the financial responsibilities of homeownership, a home appraiser who will determine the value of the property for sale, and a real estate attorney who will review documents and agreements carefully for your peace of mind.

Finally, remember that any significant milestone in your life requires time and patience, including your journey to homeownership. Remember to set realistic expectations while staying committed to your goals. Be prepared for the ups and downs of the process, especially if you're in a competitive market where bidding wars are common and your offer might get rejected. Avoid rushing into a decision and trust that the right property that fits your needs and financial capability will eventually come along.