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Is the possibility of lower mortgage rates next year getting you into the home buying spirit? If you’re like many, you may be thinking about starting the search for a home in the first part of 2025. There are a few things you can do now to help ensure you’re ready when the new year is here. 

Review Your Finances

First things first, you need to determine how much of a mortgage you can afford. That will tell you how much you need to save and what your budget will need to look like.

Begin by taking account of your monthly income, debt, necessary expenditures, and how much you’re putting into savings and retirement funds. Then, use a trusted mortgage calculator to see how much of a down payment and mortgage you are comfortable with.

You can also reach out to an expert for help. If you’re an Ascend member, we highly recommend scheduling an appointment for a free Financial Health Checkup with one of our certified financial counselors to discuss your finances. They are an excellent resource no matter what stage of your financial journey you’re on. Appointments can be made at ascend.org. 

Put Your Budget to Work

Once you know how much house you can afford and what your down payment will look like, it’s time to start using your budget to maximize your savings.

There’s really no right or wrong way to make a budget — no matter if you like a good spreadsheet or a trusted app on your phone, just find what works for you, and stick to it. Here are a few quick tips to get you started:

•        Make a list of your monthly essential and priority costs – Essentials are things like your housing payment and utilities, car loan, insurance, and fixed costs like student loans, while priorities include charitable contributions, savings, and retirement contributions.

•        Calculate what’s left and use it – After your essentials and priorities are handled, the rest of your money each month is yours to spend or roll over to the next month. Just remember to keep track of how much you’re spending, and if you’re rolling money over, put it into a high-yield account.

•        Put your savings in high-yield accounts – High-yield checking and savings accounts, as well as certificate accounts, are great tools to save for a mortgage. They offer a high rate of return without the risk of investing in the stock market, making them a guaranteed way to boost your savings. Ascend recently introduced a Home Purchase Share Certificate account that’s designed exclusively for those saving to buy a home. Learn more at ascend.org/certificates.

•        Automate your payments and transfers – Set up automatic payments so you don’t miss any due dates, as well as automatic transfers so you know exactly what is moving in your accounts each month. 

Monitor Your Credit Score

A good credit history is an important part of securing the best mortgage. It’s a good idea to start monitoring your credit score now and do some easy things to give it a little boost, like pay your bills on time, reduce your debt and credit utilization ratio, and use your credit cards often but always pay them off in full every month. 

Research Loan Programs and Get Pre-Qualified

Finding the perfect mortgage is no different than shopping for anything else. It’s always wise to take your time and research different loan programs with different lenders so you find the best one for your unique situation. 

Once you have the perfect mortgage program identified with the right lender, get pre-qualified for your mortgage before you start looking for your dream home so you’re ready to jump on it. Mortgage pre-qualifications are typically valid for 30-120 days, depending on the lender, giving you time to search. You can also reapply. 

Start Now

Though 2024 is winding down quickly, it’s not too late to start preparing for your 2025 home purchase. Get a plan together now and put it into action.

Your dream home is out there. Make it yours in 2025.

Ascend is federally insured by the NCUA. NMLS#451452. All loans are subject to credit approval. Ascend is an Equal Housing Lender.

Melisa Richard is the Assistant Vice President of Mortgage Origination at Ascend Federal Credit Union.