05/24/2013 10:40 am ET Updated Jul 24, 2013

If You're House Hunting, Consider These 5 Tips

For Women & Co. by Jonathan Clements, Director of Financial Education, Citi Personal Wealth Management

After years in the doldrums, the U.S. housing market is finally showing signs of life. Looking to buy a home? Here are five tips to keep in mind:

1. Save 20 percent.
To avoid taking out private mortgage insurance, you typically have to put down 20 percent of a home's purchase price. If you're in your 20s and fairly new to the workforce, it can be hard to scrape together that 20 percent, unless you get help from your parents or elsewhere. Still, save as much as you can. The more you put down, the easier it should be to get a mortgage.

2. Check your credit.
Your ability to borrow will depend not only on your income and the size of your down payment, but also on your credit score and credit history. To get a free copy of your credit report from the three major credit bureaus, go to If there are any errors in your credit reports, try to get them corrected before you put in your mortgage application.

3. Location, location, location.
When settling on a town or neighborhood, homebuyers often pay attention to things like nearby shopping, the reputation of the schools, and the quality of local housing. But also think carefully about how far you will have to commute each day. An extra 10 minutes' drive to work might seem like small potatoes -- but, after a few weeks, it will likely loom large. Indeed, studies suggest that a lengthy commute can put a big dent in your personal happiness.

4. Buy for the long haul.
Purchasing -- and especially selling -- real estate can be incredibly expensive, so you want to do it as infrequently as possible. That means aiming to buy a home that you can see living in for a good, long time, and preferably no less than five years. To boost the chances that you will be happy remaining in your new house, you might even stretch to buy a slightly more expensive place -- but only do that if you think your job is secure and your income is likely to rise.

5. Prepare to walk.
Once a house catches your eye, it's easy to become an overly anxious buyer -- and to raise your bid by $10,000 or $20,000 without much thought. But it would likely take you years to save $20,000, so you shouldn't be too quick to part with the extra money. Remember, if you don't manage to purchase the house that caught your eye, there will always be other places to buy and to fall in love with.

Women & Co., a service of Citi, is the go-to personal finance source for women. By providing financial content, commentary and community, Women & Co.'s mission is to get women thinking and talking about personal finance. Founded in 2000, Women & Co. is one of the longest running personal finance websites dedicated to helping women strengthen their financial futures.