How We Bought a House (Again) in 2025

Buying a home in 2025 felt completely different from when we purchased our very first house back in 2018. Back then, home prices were much lower the market wasn’t nearly as competitive.

Fast forward to today, and the cost of housing has skyrocketed, interest rates have pushed affordability even further out of reach, and buyers are competing for fewer options.

When we moved from Illinois to Tennessee in 2022, I honestly wasn’t sure if we’d ever buy again. Selling our first house was a nightmare. We ended up holding onto it for an extra six months while also paying rent on our home in Tennessee. That season drained so much of our savings, and we had to start from scratch, rebuilding our emergency fund and sinking funds (I shared more about that process in this post).

Still, the dream of owning a home never left us. And despite the hurdles, I’m so grateful that we were able to buy again this year. I want to share the steps we took that helped us become homeowners again, along with some new tips you might find helpful if you’re thinking about buying in today’s market.

1. Check Your Credit and Pay Down Debt

Credit plays a huge role in homebuying. Your score impacts your loan approval, your interest rate, and sometimes even which programs you qualify for. We keep close tabs on our credit using free apps like Credit Karma and Credit Sesame, plus we check our FICO score through a couple of our credit cards.

Related: I Raised My Credit Score By 150 Points, Here’s How

Just knowing your score isn’t enough, though. You also need to work on paying down debt. High-interest credit cards, loans, or even multiple car payments can hurt your debt-to-income ratio and limit what you qualify for.

We were very intentional here: I still have a car loan, but my husband doesn’t. If we were juggling two car loans, buying a home would have been much harder.

Related: How to Pay Off High-Interest Debt

Achieving Financial Freedom With the Debt Snowball Method

2. Talk to a Good Realtor or Lender

Many people wait to talk to a realtor or lender because they’re afraid of being pressured into buying before they’re ready. But here’s the truth: a good realtor won’t push you, and talking to a lender early can only help.

Realtors often have trusted lender partners who can walk you through pre-approval, let you know how much house you can realistically afford, and even share programs you may qualify for.

For example, a few years ago, I was talking to my old lender from Illinois and learned about Illinois’ SmartBuy Program that offers student debt relief to homeowners. We never used it personally, but it was interesting to learn about and I made sure to share it with my family and friends.

Lenders know about these kinds of opportunities and can explain the details. Even if you’re not quite ready to buy, a lender can give you clear next steps to improve your application for the future.

3. Determine a Budget

Once we knew where we stood financially, my husband and I sat down and created a realistic budget. This meant looking beyond just the monthly mortgage payment to think about:

• How much cash we’d need for closing
• What we felt comfortable paying each month without becoming house poor (something I talk about in this post)
• How homeownership would affect our other financial goals

We also thought about maintenance costs. Our first home was built in the 1960s and came with its fair share of repairs and projects.

This time, we wanted something newer so we wouldn’t feel overwhelmed with upkeep. Factoring those preferences into our budget helped us stay realistic.

Related: Best 7 Free Budget Software Programs

How to Get Your Spouse on Board With Budgeting

4. Organize Finances

Once your offer is accepted, everything moves fast. You’ll need to provide documents like tax returns, bank statements, and pay stubs quickly to keep the process moving.

Because I’m self-employed, I had to show two years of tax returns. But given the timing of our closing, I ended up showing three years since we had just completed our taxes for the new year. I also prepared letters of explanation for income fluctuations in my business, just in case. Thankfully, I didn’t need them, but being organized ahead of time made a huge difference.

Our lender and realtor kept the process moving smoothly, and we were able to close in just 30 days.

5. Don’t Make Any Sudden Movements

When you’re under contract, it’s so important to avoid making big financial changes. Don’t apply for new credit cards, take out loans, or make large purchases. Even if you have the money saved, it could affect your mortgage approval.

For example, my husband had been saving to buy me a new wedding ring for our anniversary in May. We decided to hold off until after closing so it wouldn’t interfere with our mortgage process. Totally worth the wait!

6. Get an Awesome Team

This time around, we had an amazing team, and it made all the difference. Our realtor and lender worked together seamlessly, and they helped us in ways I wouldn’t have thought of:

• Rate lock: Our lender encouraged us to lock our rate early, protecting us from potential interest rate increases before closing.
• Special mortgage program: We qualified for a conventional loan without PMI even though we only put 5% down. I had never heard of this option before our lender brought it to us. And our mortgage payment is much lower without PMI!
• Closing cost savings: Our realtor negotiated for the seller to cover our entire closing costs. She also encouraged us to counter-offer on the final sale price and we were able to get our home for $10,000 less than the listing price.
• Rate buydown: Our lender also helped us buy down our rate slightly, lowering our monthly payment.

These strategies weren’t even on my radar, but having the right team in place saved us thousands.

Additional Tips for Buying a Home in 2025

• Get pre-approved before you shop. We went to some open houses and this is fine if you’re just casually looking. But when you’re serious be sure to get pre-approved. It’ll give you a clearer budget and make you a stronger buyer.
• Be flexible with location. In today’s market, expanding your search radius (even just 15–20 minutes out) can give you more options within budget.
• Save beyond the down payment. Closing costs, moving expenses, furniture, and small repairs add up fast. Aim to save at least 2–5% extra.
• Consider future-proofing. Think about resale value, school districts, and neighborhood growth. Even if this isn’t your “forever home,” it should still be a solid investment.

Summary

Buying a home in 2025 may seem challenging, but it was possible because we prepared, stayed realistic, and worked with an incredible team. Compared to when we bought in 2018, the market looks completely different with higher prices, steeper rates, and a lot more competition. But with the right strategy, it can still be done.

If you’re thinking about buying, don’t get discouraged. Start by checking your credit, paying down debt, and connecting with a trusted realtor and lender. Build your budget around your life and goals and not just the maximum amount a bank says you can borrow.

I’m so glad we made it through this process and found a home we love, and I hope these tips help you move one step closer to your dream, too.