What 2011 home buyer’s should know…NOW!

• Give yourself a head start by making sure you are pre-approved in advance. If it has been a while since your last pre-approval, Make sure that you get an updated approval and pre-approval letters, many lending guidelines have changed and you want to make sure you are pre-approved to the current underwriting guidelines.
• The monthly FHA mortgage insurance premium is now higher than it was earlier in the year. If you are an FHA buyer and haven’t been pre-approved or had your existing approval updated in the last 30 days, contact a mortgage lender to get a fresh approval.
• If you already know who you will be using as your Realtor, make sure that your lender and your Realtor are in communication often. As you begin to submit offers, it is critical that they work as a team to make sure you get the best performance possible giving you more strength as a buyer.
• If you know the neighborhoods you would like to live in. Start driving by the areas at different hours in the day and night, weekdays and weekends to get a feel for the community and to verify you can imagine yourself living there.
• Get serious about a budget and start now. If your current rent is lower than your future payment, begin to allocate your future mortgage payment towards housing. Whatever is left over after paying rent can go directly into savings so that you have sufficient funds to cover your down payment and closing costs.
• Be extremely cautious when filing your 2010 tax return. I have seen tax returns, where the non-CPA tax preparer just “threw in” some non-reimbursable business expenses to save the person some money on taxes. Make sure that you review all deductions and understand what you are signing and agreeing to when you file your 2010 tax returns. When possible, always consult with a CPA. My advice, talk to a CPA to make sure that you file the most accurate tax returns possible.
• Review any existing leases and consult with your landlord regarding your exit strategy, subleasing, move out requirements, etc. so that you know your exit strategy for your existing housing obligations.
• If you are a move up buyer, make sure that any existing home being converted into a rental is prepared and ready to be rented. Especially if future rent on the home is being used to qualify.
• Have fun with the process, it can be really exciting to know that each step closer is a step towards making a dream come true!

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