Are you a first-time homebuyer who wants to take advantage of the recent decline in home prices ... but you’re still on the fence wondering if it’s REALLY a good time to buy your first home?
For months now, news media hype focusing on doom, gloom and fear has kept first-time homebuyers like you out of the market, despite your desire to become a homeowner. But if the high value and low prices of the current buyer’s market haven’t been enough to get you off the fence ... you now have one more reason to get out there and find your perfect “first place.” And that reason is.... the tax deduction from your mortgage interest. Continue to fence-sit and you’ll miss out altogether on the mortgage tax deduction credit that has your name on it for next year's tax return.
If you’ve never bought a house before, you’re probably wondering why the rush … you’ve got until next tax season's deadline, right? Yes, BUT ...
While the next tax season may seem far away right now, buying a house is a process and can take longer than you think. With loan applications already taking 45 days, the wait could easily extend to 60 days or more as the deadline nears and lenders are flooded with first-time buyer applications. If you wait until later in the year to finalize your purchase, then your tax deductions will me minimal. Here’s what you must do to get there:
- Apply for a mortgage and get pre-approved. Why is this first? It’s best to line up your funds now so you’ll know the price range you can afford. It also uncovers any financial snags you may be facing. Once you provide all your documents and get pre-approved, both your real estate agent and home sellers will know you’re serious about buying. Give yourself one to two weeks to accomplish this.
- Choose your real estate agent. It’s important that your agent be familiar with the area you’d like to live in. So, choose the area and then choose your agent. Allow one to two weeks to find the agent that’s right for you.
- Shop for a house. Shopping for your first home takes time. Even with an agent’s help, you should estimate three to four weeks to find a home you love at a price you can afford. To speed this up, search online at my Web site at www.aare.org
- Make your offer, negotiate terms and get in contract. Because the market could really heat up with people wanting to take advantage of the $8,000 tax credit, you may have to offer on more than one home before getting an offer accepted. With each rejected offer you must search for another home. Short sales and bank-owned homes can take more time than you may have, so discuss this with your agent. Estimate two to three weeks for this step. So far, the previous time estimates show that you need from 7 to 11 weeks to get to this point.
- Finalize your financing and close the loan. Remember, you still have to wait for an appraisal and all the inspections, as well as for the bank's underwriter to approve your loan. Allowing six to eight weeks for this portion of the process takes you to the closing table.
Is it possible to accomplish everything in less time than estimated above? Yes. But it could also take longer. Do you really want to delay and risk losing the opportunity to chop off thousands from your next tax bill? If you’re anything like me, you’ve got better things to do with money than give it to Uncle Sam.
Let's get your home purchase moving.