How to make a new site in the background?

Hello Everyone,

I am a bit confused about how to go about doing something. I have a website https://www.example.com which has been around 7 years. I want to replace the old site with a brand new one. The new site will be completely WordPress. I have access to a different host than the one https://www.example.com is currently on. On this different host I would like to instal WordPress and create my new site. Then when its all nice and ready move the URL https://www.example.com over to the new host and new WordPress install.

Is this possible?

When I am creating the new site do I need a domain name for the temp site? Or can I just use whatever IP Address is giving to me? How will this effect links and permalinks when I move the old URL example.com over it?

Thanks for any advice. I am a bit of a newbie when it comes to this topic so please explain in simple terms.

Very much appreciated,
Oliver