How to Buy a Home in 2025

Key Takeaways

Before you think about buying a house, make sure you’re debt-free, have a fully funded emergency fund, and are ready to stay put for a while.
Stick to a smart budget by keeping your monthly mortgage payment at or under 25% of your take-home pay and by saving at least 20% for a down payment to avoid private mortgage insurance.
Get preapproved for a 15-year fixed-rate mortgage, and team up with a real estate agent to guide you through the process with confidence.
Take your time house hunting, stick to your must-haves, and work with your agent to make a strong offer without going over budget.
Be patient through important steps like the inspection, appraisal and final loan approval—they’ll protect your investment and give you peace of mind before closing.

Buying a home is a huge deal, you guys. And when you throw an expensive real estate market on top of it, shopping for a home can feel like buckling up for an emotional roller coaster.

But I’m here to share a step-by-step process for how to buy a house in 2025, along with a Home-Buying Checklist to keep track of it all. We’ll go over things like figuring out if you’re ready to buy, saving for a down payment, and getting preapproved for a mortgage. Then we’ll look at what you need to know about finding a real estate agent, putting in offers, and making it all the way to closing day.

And don’t worry—I’ll break down all the real estate terms along the way so you’re never left scratching your head. We’re in this together. Let’s get started!

10 Simple Steps to Buy a House

Use this step-by-step plan to buy a house the smart way, and download our complete Home-Buying Checklist to follow along with your progress.

Step 1: Make sure you’re financially ready to buy.

First things first: Before you jump into the home-buying process, I want you to be debt-free with 3–6 months of expenses saved up in an emergency fund. Think of this money like an insurance policy against life—it’s important to have this safety net when you get ready to make a big purchase like a house.

Picture this: When you buy a home, you’re the landlord! That means paying for repairs is your responsibility. So, if the water heater springs a leak two weeks after moving in, it’ll be no big deal because you have an emergency fund to cover the repairs.

But when your budget is eaten up by debt payments and you don’t have any savings to fall back on, you might be eating ramen for the rest of the month just to get that water heater fixed. That’s not fun . . . or tasty. With a full emergency fund and no debt draining your monthly budget, an unexpected repair will just be an inconvenience—not the end of the world.

Another thing to think about before buying a house is your stage of life. It doesn’t make sense to buy a house if you plan to move sometime in the next few years. Buying and selling a house is an expensive process, and moving too quickly usually means you’ll lose money when you resell the home. This is also one of the reasons I recommend waiting at least a year after getting married before you buy a house.

Here are seven things to check off your list before you’re ready to buy a house:

You’ve paid off all your debt.
You’ve saved up a fully funded emergency fund.
You can afford monthly mortgage payments and home maintenance.
You have a good down payment.
You can pay your closing costs and moving expenses with cash.
You plan on staying put for a while.
You have a real estate agent you trust.

Still not sure where you fall? Take our assessment to see if you’re ready to buy.

Step 2: Figure out how much house you can afford.

If you’re ready to buy, your next step is figuring out your home-buying budget. You should only buy a house when the monthly payment is no more than 25% of your monthly take-home pay. Anything more than that and you risk being house poor. Sticking to this number leaves plenty of room in your budget to cover home maintenance and repairs while hitting your other money goals, like saving for retirement.

To be clear, that 25% limit includes principal, interest, property taxes, home insurance, homeowners association (HOA) fees and private mortgage insurance (PMI). Use our Mortgage Calculator to try out different home prices within your budget.

Once you know how much you can afford to spend on your new home, stick to that amount. And if you’re buying a home with your spouse, make sure you’re both on the same page about your budget. You don’t want any surprises when it comes to saving for a down payment.

Step 3: Save for a down payment.

Just like any goal, buying a home the smart way takes planning and preparation. So, even though saving for a down payment will take some time and discipline, it’s a crucial part of this whole process.

How much should you save? Aim for putting 20% down so you can avoid PMI, a fee added to your monthly mortgage payment to protect your lender in case you default on your loan. If you’re a first-time home buyer, a 5–10% down payment is fine, but it means you’ll be paying PMI a little bit longer.

You should also save up enough cash to cover two other important costs:

Closing costs: You should save around 3% of your home’s purchase price for closing costs, which cover any property taxes, insurance items or fees charged by your title company and lender. That percentage might vary depending on what area you’re buying in, and it doesn’t include the cost of your real estate agent (more on that later).
Moving expenses: Moving expenses can vary from hundreds to thousands of dollars depending on how much stuff you’re moving and how far away your new home is from your current place. To help with budgeting, call a few moving companies in your area for quotes ahead of time. If you plan to make updates to your home—like painting the walls, installing new carpet, or buying furniture—you’ll need cash for that too.

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