How to prepare your finances to buy a house in 2026

As we approach the new year, potential homebuyers are asking how to prepare finances to buy a house in 2026. If your goal is to become a homeowner in the new year, preparing for this major milestone will be a key first step toward success.

Learning what you could expect from the 2026 housing market, as well as tips to prepare your finances before buying a home, could turn you into an informed buyer and help you get set up to enter the housing market in the new year.

If you are ready to begin the process of entering the housing market, you can start by getting pre-approved today!

While no one can accurately tell you what the housing market will look like in 2026, the National Association of REALTORS® (NAR) Nationwide Forecast is predicting a rise in new and existing home sales across the country. In its forecast, the NAR is also predicting a slight decrease in mortgage rates and a slight increase in the median home price.

With a prediction of lower mortgage rates, it makes sense for the NAR to see more homebuyers entering the market and home prices increasing a bit to match.

It is important to remember that you should not wait for the housing market before you think of getting a mortgage or buying a home. The housing market can be unpredictable, so waiting for it to improve might leave you waiting longer than you hoped.

If the market gets better after you have secured a loan to buy a home and end up wishing you had waited, you could always refinance your mortgage to match mortgage rates in 2026.

If you are looking to buy a house, here are a few things you can do beforehand to make sure you are prepared.

Getting pre-approved is one of the best ways to prepare for buying a home. A mortgage pre-approval will show sellers and yourself the home loan amount you qualify for.

A pre-approval will also show you the terms of your loan, allowing you to see and plan for your mortgage and monthly payments. Having a pre-approval before shopping for a home will allow you to focus on shopping for a home within your budget.

Your credit score is one of the first metrics lenders look at during the mortgage process. The higher your credit score, the better your chances of being approved for a mortgage with favorable terms. Checking your credit score can let you know if you are in a good position to get favorable terms or need to work on building up your score before looking for a home.

Checking your credit score early can be helpful in case your credit score isn’t as high as you are hoping.

Another key element lenders look at is a borrower’s debt-to-income ratio (DTI). This shows lenders how much of your monthly income is set aside to pay debts. Paying off debts will reduce your DTI and free up some money for your monthly mortgage payments.

Reducing any high-interest debts specifically can free up extra cash, which you could put toward your monthly payments or save for a down payment.

Depending on the loan you choose, down payments options can be up to 20% of your total home cost. Large down payments could seem daunting when you start looking for a home, so saving money as soon as you can could make buying your dream home feel possible.

“The best way to save your down payment is to look at your finances and to find out what your goal is for maximum total mortgage payment which includes taxes, insurance and any HOA fees that you are comfortable paying.” Said Senior Vice President of Mortgage Lending, Dan Rogers.

When you know the amount that you are comfortable putting towards a mortgage each month, Rogers encourages putting that money aside on the first of each month. “This not only will help you save for your down payment but it will give you a trial run to see how comfortable it is for you,” Rogers said.

Loans are available with down payment options lower than 20% if you meet specific qualifications. However, lower down payment options may require private mortgage insurance (PMI).

The larger the down payment you make, the less you will need to borrow from a lender.

There are many mortgage options available for potential homeowners. Learning about different mortgages can prepare you for buying a home by telling you what you will need to qualify for each option.

You can learn about mortgage options online or through talking with a Loan Officer. Loan Officers can help look at your financial situation and show you the mortgage options you could qualify for.

If you are ready to buy a home but don’t think you have saved enough for a down payment, you can look into down payment assistance programs.

Down payment assistance programs work as grants that you won’t have to repay, or loans you will repay. There are also forgivable loans that you will not need to repay if you meet certain guidelines. Exploring these programs can show you how to prepare for buying a home and making a down payment that might be more than you were expecting.

You can get a pre-approval online in 10-15 minutes and see what the mortgage you could qualify for will look like.

Mortgage pre-approvals last anywhere from three to six months. So, if you are looking to buy a home next year, a pre-approval you get now will still be good for when you are ready to start looking.

Start your pre-approval application today and be prepared to buy a home in 2026!

_{All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate. Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.}

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.}