There are home-buying must-do’s

Before you jump into the wonderful world of homeownership, learn about credit score requirements, mortgage options and other must-do’s as a first step.

Whether you are a first-time buyer or an experienced owner, buying a house requires a “preflight check,” in the words of Barry Zigas, director of housing policy for the Consumer Federation of America.

Read on for Bankrate’s checklist, including tips on the types of savings you need, plus advice about what matters beyond purchasing a home at its resale value. Strengthen credit score

“It’s a brave, new world with respect to credit requirements for mortgages,” said John Ulzheimer, president of The Ulzheimer Group and a credit expert.

One old rule still applies: The higher your credit score, the lower your monthly payments.

“Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment,” Zigas said.

Vicki Bott, a former official at the U.S. Department of Housing and Urban Development, said that her office noticed much the same thing.

“While there are many qualified borrowers in the 580 range, the market today is probably (looking for) 640 to 660, at a minimum,” Bott said.

On the other end, a score of 700 to 720 will get you a good deal, and 750 and above will garner the best rates on the market.

Improve your chances by: pulling your credit reports and ensuring you’re not being unfairly penalized for old, paid or settled debts, Zigas said.

Stop applying for new credit a year before you apply for financing. And keep the moratorium in place until after you close on your home, Ulzheimer said. What can you afford?

Get a home that’s financially comfortable.

There are various rules of thumb that will help you get an idea of how much home you can afford. If you’re using FHA financing, your home payment can’t exceed 31 percent of your monthly income. But with some mitigating factors, the FHA will let you go higher.

For conventional loans, a safe formula is that home expenses should not exceed 28 percent of your gross monthly income, said Susan Tiffany, retired director of personal finance publications for adults for the Credit Union National Association.

Improve your chances by: trying on that financial obligation long before you sign the mortgage papers, said Tiffany. Before you home shop, calculate the mortgage payment for the home in your intended price range, along with the increased expenses. Then bank the difference between that and what you’re paying now. Save for down payment, closing

Depending on your credit and financing, you’ll typically need to save enough money for a down payment — somewhere between 3 percent and 20 percent of the home’s price.

To get an FHA loan, you need a credit score of 580 or higher.

One exception: Veterans Affairs loans, which require no down payment.

Another cash expense: closing costs. Whatever your loan source, you’ll also need money to pay closing costs.

For a $200,000 mortgage, closing costs run (depending on where you live) from $2,300 to $4,000.

Improve your chances by: banking your own money and seeking down payment assistance, Tiffany said. Often it’s location-based or tagged to a certain type of buyer, like first-timers, she said. Search online with the city name, then the county name, along with word combinations such as “down payment assistance,” “first-time home buyers” and “home buyer’s assistance.”

In a buyer’s market, you can also negotiate to have the seller pay a portion of the closing costs. Build a healthy savings

Building your savings is something you should do over and above saving money for the down payment and closing. Your lender wants to see you’re not living paycheck to paycheck. If you have three to five months’ worth of mortgage payments set aside, that makes you a much better loan candidate.

That money also will help cover maintenance and repair issues that come up when you own a home. While repairs are sporadic, items such as a new roof, water heater or other big-ticket items can hit suddenly and hard.

Improve your chances by: setting aside money every month. A good rule of thumb: On average, you’ll spend 2.5 percent to 3 percent of your home’s value annually on upkeep, repairs and maintenance, said Joseph Gyourko, professor of real estate at the Wharton School of the University of Pennsylvania. If you’re buying a $250,000 home, aim to save $520 to $625 per month. Get preapproved

For serious home shoppers, “the No. 1 thing is they better have everything in order,” said Dick Gaylord, broker with RE/MAX Real Estate Specialists in Long Beach, California, and former president of the National Association of Realtors. That means that, before the real home shopping begins, you want to get financing in place, he said.

“That documentation around income and assets is very essential, more so than in the last five years,” Bott said.

Improve your chances by: getting financing in place “before you walk through the first house,” Gaylord said. Otherwise, he asks, “How do you know how much you can afford?” Buy a house you like

If you’re buying today, you want a home that will make you happy for the next few years.

You can’t always count on a quick sale.

And depending on how much you put down, and how much you have to shell out to sell and relocate, short-term ownership can be a pretty expensive proposition.

Improve your chances by: stepping back, Gyourko said, and making certain “you like the house.”