Want to buy a home in 2027? Here's how to start preparing right now

If you want to buy a home next year, start preparing now. 

It can take six months or more to get your finances in order, and even more to be offer-ready, according to Zillow. Especially now, with mortgage rates above 7%, planning and careful strategizing could save you thousands of dollars. 

CNBC Select created a short checklist you can reference if you plan to buy a home in 2027. 

The larger your down payment, the more you’ll save when you buy your home and over the course of the loan. Here’s how:

• No private mortgage insurance (PMI): If you put more than 20% down, you won’t have to pay for a private mortgage insurance premium, which could cost 0.10% to 2% of the loan value annually. 
• Potentially lower mortgage rate: The more you put down, the less you’ll have to finance with a mortgage, so your debt-to-income ratio — or the amount of money you make versus the amount you have to put toward debt goes down — is lower. DTI is a key factor in how lenders determine your mortgage rate, so if a smaller fraction of your income goes to your mortgage, the lender may give you a lower rate. 
• Less total paid in interest over the life of the loan: Even if you can’t score a lower rate, you’ll pay less in interest overall because your principal will be smaller. 

Whether you’ve been saving for years or you’re starting soon, you should put your funds somewhere they will earn more. 

A high-yield savings account is a flexible tool for this purpose. This type of deposit account offers interest rates up to 4% and, in most cases, you can access it as often as you need. So your money will grow and you’ll be able to easily take it out when it comes time to make your purchase. 

If you’re looking for an account, Happen Bank LevelUp Savings is a great option because it offers a high APY and a free debit card that lets you withdraw up to $4,000 per day. 

The next step is paying down existing debt. 

Lenders will consider how much debt you have to pay back each month compared to what you earn. This debt-to-income ratio will be a factor in considering your application, rate and terms. 

Setting aside money in your budget to pay down debt is a smart strategy and, if you have high-interest debt like credit cards, consider a debt-consolidation loan. 

These loans typically offer a lower rate, so you can pay off your debt faster. If you want to consolidate as soon as possible, we recommend LightStream. It will fund your loan the same day your application goes through, if that occurs before 2:30 p.m. ET

Your credit score is a huge factor in your rate and whether you get approved for a loan. Most lenders want to see a 620 credit score or higher for a conventional mortgage, but you’ll get the lowest rate if your credit is above 740. 

Experian tracks the average 30-year fixed mortgage rate by credit score and found that someone with a 620 credit score had a 7.61% rate on average in September, while the average person with 780 credit score or higher had a 6.85% rate on average.

Paying down debts will help your credit, but you should also keep your credit utilization low, make on-time payments every month and don't take on new debt.

You can also use *Experian Boost, which pulls on-time rent and utility payments into some of your credit reports. Experian claims people can raise their score by 12 points on average. 

Finally, look around for a lender that’s best for you. Think about your needs, what type of loan you want and what type of lender you want to work with. 

For example, you may want a lender with down payment assistance, government-backed loans or one that has many retail locations. Here are some of our favorite lenders to help you start your search. 

Best for low rates: Better Mortgage

Since rates are high, you may want a lender with a history of offering lower-than-average rates, like Better Mortgage. Better also has an option that allows you to wrap closing costs into your loan if you decide to refinance — so if you want to get a lower rate in the future, you won’t need thousands in cash set aside for closing costs. Keep in mind, though, that you’ll still pay interest on the sum in total. 

Best for customer service: Rocket Mortgage 

If you prioritize customer service, consider Rocket Mortgage. It consistently ranks at the top of J.D. Power’s customer satisfaction surveys, and its phone, email and chat system has robust hours, including on evenings and weekends. Plus, its website and app are easy to use. However, it has no physical locations. 

Best for in-person service: Chase Bank 

If you prefer to do your banking in person, Chase Bank is a great option. Not only does it have a history of excellent customer service and a diverse array of loan options, but it has over 4,500 retail locations throughout the country.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties and we pride ourselves on our journalistic standards and ethics.

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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.