Getting your finances together to buy a home

NEW HAVEN, Conn. (CNN) — If you want to buy a house, you’re not alone. Many first-time buyers face competitive markets that favor sellers. So, we are stretching your dollar with tips that will help you snag a good pad. Whether you’re buying a home or about to make another big purchase, there are steps you can take to ensure you get the loan you need.

The road to home-ownership can be long but here’s where experts say you should start. Check your bank balance. Many lenders typically like to see a 20 percent down payment, even before you can get a loan. If 20 percent is too steep, there are some down payment loans that need as little as 3.5 percent.

Either way, you’re gonna need some cash and that means either creating or amending budgets. Remember, anything less than 20 percent means you’ll pay more every month. Know your credit score. The higher the score, the more likely you are to get a loan and a lower interest rate.

There are three major credit reporting companies. Federal law mandates each company give you one free report once a year.

Look at the reports carefully and get any mistakes fixed. Also, lenders check your debt-to-income ratio. That’s your monthly debts divided by monthly income. Many lenders want to see the number no higher than 43 percent.

Check with your bank and ask what it is willing to lend you, then research houses. Go online so you can get an idea what houses cost in the area you want to buy. Taking these steps may make buying a home less rocky.

It’s really good to start working on your financial health even if you’re not looking to buy a home. Then if you ever need to make a move, you have years of good credit to back you up.