7 Money Moves To Make Now If You Want To Buy a House in 2026
Written by
Sarah Li Cain
Edited by
Rebekah Evans
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With what seems like sky-high prices and interest rates, buying a home may seem like a faraway dream for you. But if you’re serious about owning a home, the best time to get ready is right now. Being prepared and truly understanding what it takes to become a homeowner is key.
Here are seven ways you can get closer to your dream.
Check and Boost Your Credit
Your credit score is a major factor in whether lenders approve you for a mortgage and the rate you’ll ultimately be approved for. Even a modest boost in your credit score can save you thousands, if not more, in interest throughout the life of your mortgage.
To start, get your credit reports from all three credit bureaus. You can do that for free at AnnualCreditReport.com. Look at what factors may be affecting your scores and if there are any errors, make sure to dispute them.
Some of what you might have to do is to work on lowering credit card balances, continue to pay bills on time and avoid applying for new loans when it’s time to get a mortgage. Since it can take a while to see improvements in your credit score, give yourself plenty of time to work on this step.
Start Saving for Closing Costs
According to Zillow, most will need to pay around 2% to 5% for closing costs. That doesn’t include the down payment, which can set you back at least 3% to 20% of your home’s purchase price for most home loans. For example, if you purchased a $350,000 home, your down payment could be anywhere from $10,500 to $70,000. Your closing costs could cost between $7,000 to $17,500.
While it sounds like a huge amount, start small. Even little but consistent savings will add up over time. Consider keeping the savings in a separate account so you can monitor how much it grows.
Pay Down High Interest Debt
Another factor for mortgage lenders is your debt-to-income ratio (DTI). It’s the percentage of your gross income that goes towards your debt payments. The higher the DTI, the more it seems like you may be stretched too thin to take on another loan. Lenders typically want a DTI at or under a certain percentage.
If you need to lower your DTI, work on paying down your debt and keeping the balances down. Or, you can also work on increasing your income.
Maintain a Stable Job History
Mortgage lenders want to be sure you have enough income to pay back your loan. In most cases, they’ll want to see that you’ve had at least two years of consistent income, such as from a job.
If you’re self-employed, you may need to provide more documentation. Take the time to gather your profit and loss statements, tax returns and any other documents that show you have the means to take on a mortgage.
Monitor Your Spending
Reviewing your spending can help you spot any ways you may be able to cut back. Or at least to see how much you’re currently spending on housing costs and to help you use that as a guide after you close on your home.
If you find opportunities to cut back, consider using the money towards your house fund, whether that’s for closing costs, the down payment or moving expenses.
Research Loan and Assistance Programs
Aside from looking at the types of loan you may qualify for, consider looking at your local government agencies or nonprofit organizations. These places may offer first-time homebuyer grants or other types of loans that could help you cover closing costs or down payments.
Knowing what your options are early on helps you to match your savings goals and financial habits to get you on the best way to homeownership.
Shop Around for Lenders
Seeing what rates you may get with several lenders can help you see how much house you can afford and what the best rates and terms you can qualify for based on your financial profile. Consider getting prequalified and help you set a realistic target to see what you need in order to purchase a home.
