By David Uffington
King Features Syndicate
The $8,000 tax credit for first-time homebuyers has been extended, but only until the end of April. To take advantage of the credit, you must have a house under contract by that time and close within 60 days. Additionally, another category of homebuyer has been added: Those who have owned (and lived in) their current homes for at least five years may qualify for a $6,500 credit if they buy another home.
If you're ready to buy now, step one is to get yourself pre-approved. Don't mistake "pre-qualified" for "pre-approved," because they're not the same thing. Pre-qualifications are preliminary, informal "running the numbers," and often can be done by phone. The lender at the other end will ask about your income and expenses and determine if you have the right debt-to-income ratio, and might do a fast credit check to see what your FICO score is.
Pre-approval involves all of the above, with many extra steps, mostly involving showing paperwork to the lender. It'll need to verify all your information. At the end of that process, if you're qualified, you'll be told that you're pre-approved. This is the point where you ask for that pre-approval in writing. You'll know your price range and won't waste time on homes you can't afford. That pre-approval also will help you when you submit an offer: The seller will know you're serious. Additionally, you'll likely be able to close faster as much of the paperwork will have been completed.
Some caveats about buying a home in the winter: If there's snow on the ground and the roof, it can hide a number of problems. Solution: Check Google maps satellite photos of the house. Those photos are generally taken in the fall when there's no snow on the ground and fewer leaves on the trees to block visibility. Google maps also will show you a street view in many locations. If the house doesn't look the same as it does now, or if you see a blue tarp on the roof, ask questions. You also can check the yards of your potential neighbors and businesses around you. Unless you know the area very well, you could discover creeks, dumps and junkyards you didn't know were there.