2025 is around the corner, and everyone is setting goals and writing out their resolutions. Do your goals include buying a home for the first time? If so, you probably already know there are some steps to take to get there. You’re probably aware that you need to qualify for a mortgage, hire a real estate agent, and find the perfect home.

For first-time homebuyers, that first step can be the most difficult. Especially with higher interest rates driving monthly payments up, many first-time buyers are struggling with affordability. Mortgage requirements can be tough to meet, so if your 2025 goals include buying a home for the first time, we suggest you make the following 5 resolutions.

Resolution #1: Work on Your Credit Score

Your credit score can significantly affect how much you'll pay for your home, the amount you must put down up front, and whether you'll qualify for a mortgage. A conventional loan requires a minimum credit score of 620, while a USDA loan might require a score of 640. A score of 580 can get you an FHA loan at 3.5 percent down, but a lower score could force you to make a downpayment of 10 percent or more.

You can raise your credit score by paying down debt, making monthly payments on time, and not opening new credit accounts or closing current ones. You also want to avoid applying for anything that requires a credit check (also known as a “hard inquiry” or “hard pull”) that damages your credit score.

Do you check your own credit score frequently? Don’t worry! Checking your credit report through a credit bureau or tracking your score as it’s provided for you by a creditor is considered a “soft pull” and won’t damage your credit score. It’s a good habit to keep your eye on your credit to ensure everything on there is accurate and so you know what progress you’re making toward mortgage qualification.

Resolution #2:  Pay Down Debt

Your debt amount doesn't just play a pivotal role in your credit score; it also impacts the size of the mortgage loan you can obtain. Lenders want to see a debt-to-income ratio of 43 percent or lower, with 50 percent or higher disqualifying you for loans with more attractive interest rates. To make the debt reduction process less intimidating, focus on one credit card or loan at a time while continuing to make your minimum payments on other cards or loans.

Which debts should you pay off first? That depends on your strategy. The most tried-and-true method is to pay off the ones with the highest interest rates first (again, while continuing to make minimum payments on other debts). Store credit cards usually have the highest interest rates, followed by credit cards, personal loans, and other installment loans like auto and student loans. Check your cardholder agreement or loan terms for the most accurate information. 

Resolution #3:  Save for Your Downpayment

Any list of first-time home buyer tips should include saving for a downpayment. Once you've improved your credit score by reducing your debt, you can focus on gathering the necessary funds for this crucial step. Down payments can range from a mere three percent for first-time homebuyers to over 20 percent of the home's value. The more you can put down, the better your debt-to-value ratio—and the lower your monthly payment will be. 

Another bonus of paying more upfront? A downpayment of less than 20 percent might require you to purchase private mortgage insurance. If you can pay more now, you’ll save more on interest and mortgage insurance in the long run.

How can you save for a downpayment when you likely have to pay rent at the same time? Besides the common saving tips like budgeting, cooking at home, and spending less on non-necessities, you should also look for first-time home-buying resources in your area. Many states, counties, and even cities have programs that provide forgivable loans and grants for first-time buyers to use as downpayment assistance.

Still in doubt? Ask a real estate agent! We have connections with local lenders, and if you tell us more about your unique situation, we can point you in the right direction.

Resolution #4: Avoid Large Purchases

If you’re trying to buy a home for the first time, you’ll want to steer clear of large purchases in the meantime. You’ll need as much money as possible for that downpayment, and spending it on a vacation, new car, jewelry, or another nonessential item only sabotages your effort. Making those purchases with a loan or credit card can prove especially problematic. You can't raise your credit score and lower debt while adding new debt to the ledger.

Resolution #5: Avoid Starting a New Job

New Year's resolutions typically include significant lifestyle improvements, including a career change or a new job. You might assume that a better position at a higher salary would make you look more attractive to mortgage lenders. However, lenders require applicants to maintain their current job for a minimum period to indicate their financial stability. Conventional, FHA, and VA loans require at least two years in your current job.

What can you do if you must switch jobs while buying a house in 2025? You can mitigate the potential damage to your loan prospects by remaining in the same industry. You can also submit proof of a four-year degree in a related field or a convincing letter explaining your job change.