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What to consider before you buy

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So a marathon of “House Hunters” on HGTV has you ready for your own two-bedroom duplex with bamboo flooring, crown molding and granite countertops. Before you start poring over listings on Redfin, housing experts say there are a few things to consider.

Credit score: Lenders are generally looking for buyers to have a credit score of at least 620 these days. Although the Federal Housing Administration will extend loans to borrowers with credit scores as low as 580, many banks, under scrutiny from regulators, are imposing higher scores.

Financial advisers recommend checking your credit score at least once every four months for any discrepancies.

There are even programs to help rent payments count toward improving credit scores. Take RentReporters.com, for example, an online rent-verification service that tracks rental history that lenders can consider in a mortgage decision.

“In today’s market, if someone doesn’t have impeccable credit, they are able to have an alternative source of credit reference to allow the underwriter alternative methods of approval,” said Crispin Luna IV, founder of RentReporters.com.

Down payment: With a dearth of low-down-payment programs on the market these days, SunTrust Mortgage loan officer Richard J. Donohoe says, “saving up cash has become quite important.” You should have at lease “two months’ mortgage payments” on hand for a down payment. Some experts say double, if not triple, that amount of savings is the best way to go.

Reserves: Even when you’re renting, financial advisers recommend saving four to five months’ worth of expenses in case of job loss or any other unforeseen event. As a homeowner, you should add two more months of savings to that kitty, said Chris Herbert, director of research the Joint Center for Housing Studies of Harvard University.

“Having some ability to tap savings is certainly a good hedge against risks,” he said. “For many people, that savings takes the form of their 401(k) or 403(b) that they can tap in an emergency, but many people don’t have those kinds of assets.”

Settling down: If you can’t see yourself living in the same place for five to seven years, stick to renting because “the transaction costs of buying and selling a home are very high,” Herbert said.

Homeownership, he added, is not just a financial decision, but also a “lifestyle” choice. Ask yourself, he said: “Do you want to have the responsibility for managing a home? Do you want to put down roots in a community and get to know your neighbors?”

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