Tips for first-time homebuyers

Time is running out for potential homebuyers to take advantage of the First-Time Homebuyer Tax Credit.

So we solicited tips from five experts in the field to help potential homebuyers navigate what can be a complicated market.

Real estate agent

Role: The Internet can be a great tool for a potential homebuyer, but Willinette Cohen, a Realtor with Prudential J.R. Carucci Real Estate Inc., said it is helpful to work with a real estate agent.

Tip 1: Cohen recommended that potential homebuyers work with lenders to become pre-qualified. “It makes your offer a stronger offer,” she said.

Tip 2: “I would always ask to see a property disclosure.”

The disclosure will list all attributes the real estate agent knows about the house.

“As a Realtor, there’s nothing that we’re aware of that we would not tell a potential buyer,” she said.

Banker/lender

Role: “There are still avenues for financing,” Judy Rowlands, a senior mortgage consultant with First Niagara, assures first-time homebuyers.

But lenders have become more conservative. Rowlands said she looks for applicants with credit scores of 680 or better, an employment history of at least two years and savings.

Tip 1: When applying for pre-approval, potential homebuyers should ask about their loans, Rowlands said, such as if there is a penalty for prepaying principal on the loan.

Tip 2: Rowlands said potential buyers should also ask about programs that may be available to them. First Niagara, for example, has a First Home Club open to first-time buyers who make less than $52,240 annually.

Lawyer

Role: A purchaser’s attorney is essentially an advocate for the buyer going into the closing, said William Calli Jr., an attorney with Calli, Calli & Cully.

Tip 1: Not hiring an attorney could save you some money in the short run, said Calli, but if problems arise in the closing process, it could cost more to fix the problems later.

Tip 2: The main misconception is assuming the lawyer representing the bank is representing the buyer as well, Calli said.

Home inspector

Role: Don Archer, a home inspector with Advanced Home Inspection Service, said the role of the home inspector is to educate potential homeowners. A basic inspection typically evaluates structural integrity, as well as the electrical, plumbing and heating systems.


Tip 1: Most often, Archer said, problems found by a home inspector will not need to be immediately addressed, but occasionally a serious issue is discovered.

Tip 2: Having a home inspection is optional, but Archer said the report is valuable. “I think it’s very important to have the education to pass on to our clients – what is normal wear and tear and what may need to be improved,” Archer said.

Tax adviser

Role: Filing for the credit is something homeowners can do on their own, but Peter Brown, a tax adviser with H&R Block, said, “You might want to have somebody walk you through it.”

Tip 1: New homeowners don’t have to wait to take advantage of their credit, Brown said. “They can file an amendment against their 2009 taxes and get the credit now.”

Tip 2: Brown suggested new homeowners invest at least $4,500 of the credit back into the house in green updates. The first $4,500 in environmentally friendly improvements can be deducted from the 2010 taxes.

About the Tax Credit

To apply for the First-Time Homebuyer Tax Credit, a binding contract must be entered into on or before April 30, 2010, and the closing must take place before June 1.

To qualify, a single homeowner must make less than $125,000 a year and homeowners filing jointly must make less than $150,000 annually. The purchase price of the home cannot exceed $800,000.

The credit allows first-time homeowners – those who have not owned a principal residence for the past three years – to claim 10 percent of the purchase price, up to $8,000.

Additionally, on Nov. 7, 2009, the First-Time Homebuyer Tax Credit was expanded to include a tax credit for 10 percent of the purchase price of the home – up to $6,500 – for homeowners who have lived in their homes continuously for five out of the previous eight years.

Source: http://www.uticaod.com/business/x1487806368/Tips-for-first-time-homebuyers

By LISA KAPPS
Observer-Dispatch

For more information about the First-Time Homebuyer Tax Credit, visit www.federalhousingtaxcredit.com.