This year is an excellent year to purchase real estate. The IRS tax credit has been extended to 4/30/2010 and now includes buyers who have owned homes. Also, interest rates continue to be low, home appreciation will grow at a more stable rate and our local economy's forecast remains strong.
Here are some reasons to buy a new home:
Quality of Life (downsize or upsize)
Tax Deductibility of Mortgage Interest
Tax Deductibility of Property Taxes
Second Home or Retirement property
Appreciation Potential
Deferred Gain and Capital Gain
Principal Accumulation
No Landlord
Leverage (where else can you buy this size of an investment with 5-10% down?)
The real cost of renting (At $700 per month, with a 6% rental increase per year, you will pay $110,719 over a 10 year period.)
What do you need to do to prepare for a new home purchase?
Get your finances in order. Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining your new interest rate and other loan terms that a lender offers you.
Remember:
-Do not change jobs, become self-employed or quit your job.
-Do not buy a car, truck or van (or you may be living in it)!
-Do not use charge cards excessively or let your accounts fall behind.
-Do not spend money you have set aside for closing.
-Do not omit debts or liabilities from your loan application.
-Do not buy furniture.
-Do not originate any inquiries into your credit.
-Do not make large deposits without first checking with your loan officer.
-Do not change bank accounts.
-Do not co-sign a loan for anyone
Keep in mind that it may take 30-90 days (or more) to locate the right home, so begin the process with this in mind. Finally, never hesitate to ask questions. Ask as many questions as necessary to help you understand the entire home buying process. You are making a long term commitment and spending a major amount of money--you'll feel much better about the transaction if you stay informed and understand what's happening every step along the way.
