Every August, as the summer light starts to lean toward fall, many Vermonters find themselves thinking the same thought: maybe next year is the year I buy a home. If that’s you, here’s the good news: the best time to start isn’t when you’re ready to make an offer. It’s now, months before you ever step inside an open house.
Getting “mortgage-ready” isn’t about having a perfect financial picture. It’s about understanding where you stand today and taking a few deliberate steps so that when the time comes, you walk into the process with confidence instead of guesswork. Here’s where to start.
- Get honest with your budget
Before a lender ever looks at your finances, you should. Start by tracking what’s actually coming in and going out each month — not what you think it is, but what your bank statements say. This isn’t about restriction; it’s about information.
From there, get a realistic sense of what a monthly mortgage payment could look like alongside your other expenses. A good rule of thumb many housing counselors use is keeping your total housing costs (including taxes and insurance) at or below 30% of your gross monthly income. That number will look different for every household, and a housing counselor can help you find yours.
This is also the moment to think honestly about the full cost of homeownership in Vermont: heating an older farmhouse, property taxes, road maintenance or well and septic upkeep if you’re outside town water and sewer. Building these into your budget early means fewer surprises later. - Build your savings with a plan, not just a goal
“Save for a down payment” is easy to say and hard to do without a target. Break it down into pieces:
Vermont buyers should know that a 20% down payment is a myth, not a requirement. Many loan programs allow for much lower down payments, and down
payment assistance programs exist specifically to help. But you’ll still want savings set aside for closing costs, moving expenses and an emergency cushion so a new furnace or a slow month at work doesn’t derail you in year one.
A simple approach that works for a lot of first-time buyers: open a dedicated savings account (separate from your everyday checking), set up an automatic transfer on payday (even a small one) and let it build without having to think about it every month. Small, consistent savings habits beat sporadic large deposits, both for your bank account and for how a lender reads your financial behavior. - Understand — and start strengthening — your credit
Your credit score is one of the most misunderstood parts of the homebuying process. It’s not a measure of your worth or your financial responsibility; it’s a snapshot of how you’ve managed credit in the past, and it directly affects the interest rate you’ll be offered.
Start by pulling your free credit report (you’re entitled to one from each of the three bureaus every year at annualcreditreport.com) and actually read it. Look for errors — they’re more common than people think — and dispute anything that’s wrong. Then focus on the basics that move the needle most: pay bills on time, every time; keep credit card balances low relative to your limits and avoid opening new credit lines or making large purchases in the months before you apply for a mortgage.
If your credit needs work, that’s not a dead end — it’s a timeline. Many buyers spend six months to a year strengthening their credit before applying, and that time is well spent.
You don’t have to figure this out alone
Here’s the thing about all three of these steps: they’re a lot easier with someone in your corner who does this every day. That’s exactly what we do at Windham & Windsor Housing Trust’s Homeownership Center, a NeighborWorks Alliance of Vermont member.
Whether you’re eight months out from buying or still not sure where to start, a free session with one of our HUD-approved housing counselors can help you build a real, personalized plan — one that accounts for your income and goals. We’ll help you understand what programs you might qualify for, what a realistic budget and timeline look like and what steps will make the biggest difference for your credit.
Late summer is exactly the right time to start this work. Reach out to us today to schedule your first homebuyer counseling session, and let’s start building your path to mortgage-ready together.
