Learn how to take advantage of the tax credit for new homeowners.
For first-time and repeat homebuyers, contracts must be signed and accepted by April 30th. Buyers are racing to beat the clock, and lenders and realtors are doing their best to help them along. Real estate industry statistics suggest that approximately 1.8 million people are expected to receive the federal tax credit, and that the rebate has spurred nearly 350 thousand home sales to date.
Gil Lunsford, branch manager of Embrace Home Loans’ Fairfax, Va. branch, can discuss what local buyers should be doing right now to take advantage of the federal tax credit. Lunsford has 26 years of industry experience and leads a team of highly talented professionals with extensive knowledge of mortgage originating. He offers buyers the following tips:
Tip 1: Meet with a lender to discuss loan programs and begin shopping immediately
Because credit requirements have tightened, ALL buyers should immediately meet with a lender to discuss loan programs and obtain preapproval for a loan to determine how much they can afford. Buyers should be prepared with documentation for their income and assets. Taking this first step will make the shopping process easier and quicker.
Tip 2: Be prepared for competition in the local housing market
To overcome this issue, buyers should consider finding more than one home to buy.
Tip 3: Continue to shop online, but also engage a realtor to shop for you
Because finding more than one home to offset competition takes more time, buyers should double efforts. By continuing to search for homes online and also engaging local realtors, buyers have a better chance of securing a home by April 30th.
Tip 4: Know for certain if you qualify for the tax credit
Before spending a lot of time and energy trying to beat the deadline, make sure you qualify first. For first-time homebuyers, the home must be your principal residence and incomes cannot exceed $125,000 as a single person or $225,000 for couples. For repeat homebuyers, the buyer must have owned a home as a primary residence and lived in that home for 5 of the last 8 years. Additionally, a buyer who qualifies for the $6,500 homebuyer tax credit must live in the new home for 3 years or repay the tax credit.
Tip 5: For repeat buyers, sell your house now or be able to carry both mortgages
If selling, homeowners need to have their home on the market now, and the home needs to be in the best condition possible and priced right. If homeowners have not started this process yet, it may be too late.
Tip 6: Make an offer quickly and before the second week of April, at the absolute latest
To qualify for the tax credit, buyers must have a contract signed and accepted by April 30. Buyers must also be prepared for increased competition in April with many other buyers racing to beat the deadline; therefore, offers should be in by April 15.
Tip 7: Stay in close contact with your lender and realtor throughout May and June
Buyers must submit all required documents to their lender, but because of the market, this could take up to 30 days. Once a contract is in place, buyers should keep constant contact to ensure a home inspection, buy homeowners insurance, meeting deadlines required by the contract, etc.
Tip 8: Make sure the settlement date is confirmed for before June 30
This is the final day for settlements to take place in order for buyers to take advantage of the tax credit.
Founded in 1983, Embrace Home Loans is a direct lender for Fannie Mae and Freddie Mac, approved by FHA and VA, and an issuer for Ginnie Mae. Embrace Home Loans has remained a prominent leader in the industry, having helped hundreds of thousands of individuals and their families purchase new homes, lower their monthly payments and consolidate high-interest debt since its inception.
A member of the Mortgage Bankers Association of America (MBA), Embrace Home Loans is an Equal Housing Lender and an accredited business of the Better Business Bureau. Additionally, Embrace Home Loans has been recognized for its excellence in the workplace and devotion to community service through numerous local and national awards, reflecting the lender’s commitment to continued self-improvement. For more information, please visit http://www.embracehomeloans.com/.
