Great news for those wanting to purchase property this year! President Obama signed the $790 billion stimulus package, which includes an up to $8,000 tax credit available to first time home buyers (those who haven’t owned in at least three years) for the purchase of a principle residence on or after January 1, 2009 and before December 1, 2009. The other good news is that the tax credit does not require repayment. You just have to hold onto the property for at least three years!
So, why not prepare yourself to jump on the boat and take advantage of this opportunity. It’s a great time to buy. Mortgage rates are exceptional low and with an almost 10 month housing supply there are lots of properties to choose from.
Having said that, make sure your finances are in order. Remember, because of increased delinquencies and today’s tougher economy, lenders have tightened standards for both new purchases and refinances. And while mortgage financing is certainly available and affordable to everyone who qualifies, you’re going to need a solid credit score, you’ll need to be able to document your income, and, if you’re purchasing a new home without a special government program from the VA or USDA, you’re likely going to need a down payment as well - at least 3.5% for an FHA loan. And there’s no stimulus bill or bail-out plan that is going to change this. So, if you’re looking to purchase a new home in 2009, take the time to locate the following items:
- Your W-2s and tax returns for the last two years;
- Your last three months of bank statements; and
- Pay-stubs for the most recent 30 days.
If you have not checked your credit in awhile you might want to do so now. A lot could have changed since the last time you checked it, good or bad, and you don’t want any surprises that might alter your plans. Your local lender can review your credit for you and let you know if there is anything that needs to be addressed.