Tips for homebuyers to prepare for a quick purchase
By Rick Turley
Coldwell Banker
The $8,000 federal tax credit for first-time homebuyers is
scheduled to expire on Dec. 1. However, in order to qualify, the
transaction must be closed on or before Nov, 30, essentially
leaving first-time buyers with less than two months to complete the
process.
Tips for homebuyers to prepare for a quick purchase
By Rick Turley
Coldwell Banker
The $8,000 federal tax credit for first-time homebuyers is scheduled to expire on Dec. 1. However, in order to qualify, the transaction must be closed on or before Nov, 30, essentially leaving first-time buyers with less than two months to complete the process.
Get started right now. The clock is ticking. You should plan to identify and purchase your home within the next 30 days, which would then leave you up to 45 days to obtain mortgage financing and complete all the necessary steps to closing, including appraisals, inspections and title work. That means you should be under contract by early to mid-October in order to safely meet the closing deadline and qualify for this tax credit.
Find a qualified real estate agent. A team of experienced professionals is the key to making the home buying process simple and seamless. Start by interviewing and selecting an agent who understands what you’re looking for. A real estate agent will arrange showings and keep track of the properties visited. He or she should also be able to help identify suitable lawyers, mortgage lenders, home inspectors and others who will play a role in the process. Remember, an agent is an expert who will negotiate the best price and incentives on a home and oversee the sales process on your behalf. It is critical that you get a timeline from your real estate agent so that you leave enough time for the sometimes lengthy closing process to occur.
Know before you go. The first step in the home buying process is to have an idea of the type of property you want to buy. By separating the “must haves” from the “wants,” you can focus on what’s really important in a home. Free online tools such as Coldwell Banker On Location (http://www.youtube.com/coldwellbanker) and the recently launched mobile application for iPhone and Android devices, are available to help you quickly and conveniently learn about neighborhoods, view what’s on the market and compare home prices in most U.S. markets and 28 countries worldwide. If you arm yourself with as much knowledge as possible before hitting the ground with an agent, you are bound to save time in the long run.
Get your credit report in order. A sound financial track record and solid credit score can help lock in a home loan and lower interest rates. Lenders today are looking at prospective borrower’s credit reports more closely than ever, so it’s important to examine your credit report for mistakes and eradicate any “toxic” debt such as overdue credit-card payments before the home shopping begins. Rectifying mistakes is easy to do, but it can be a time-consuming process. Checking a credit score and addressing any errors will help expedite the approval process when it comes time to make an offer.
Compile your paperwork. At the same time you are working to correct or improve your credit report, you should also pull together the documents you will need to provide the lender. These documents include:
– Verification of employment form
– Two most recent pay check stubs
– Two most recent bank statements
– Copies of the last two W2 forms received from employer
– Copies of any asset statements including those for retirement accounts, stocks, bonds or mutual funds
– Copy of social security card
– If there is a co-applicant on the loan, all of these forms will be required of that person as well.
Get your pre-approval. Once the paperwork is in order, it’s time to get pre-approved for a mortgage. “Pre-approval” means that a lender has verified your credit and other credentials and is committed to making a loan. This is different (and more valuable to sellers) than pre-qualification, which simply gives you an idea of the size of the mortgage you might afford without actually committing to a loan.
Shop for the most favorable mortgage option. Owners can face misunderstandings and even lose their homes if they don’t fully understand their mortgages. It’s imperative for you to educate yourself on the risks of the different types of mortgages and select the right one for you and your family. Early on, shop around for the most favorable mortgage rate and terms. A difference of even half a percentage point can mean a considerable savings over the life of a loan. For more information on mortgages visit http://www.bankrate.com/mortgage.aspx.
For additional information and provisions on the first-time homebuyer federal tax credit, contact a local real estate agent or visit www.californiamoves.com.
A real estate veteran with more than two decades of experience, Rick Turley is the president of Coldwell Banker Residential Brokerage in the San Francisco Bay Area, incorporating 49 offices and a talented team of more than 3,000 real estate professionals. For more information please call Coldwell Banker Residential Brokerage at 415-437-4505.
