This week's "My turn" column is by Joan Fox and Barbara Roberts. brokers and owners of Prudential Fox Properties in Oneonta and Cooperstown.
Time may be running out to take advantage of the federal government's first-time homebuyer's tax credit.
If you buy a house for at least $80,000 before Dec. 1 and make less than $75,000 a year ($150,000 for couples), the government will give you $8,000!
You can use this money to reduce your bank fees (related to the purchase) or put it into your pocket. It's called a tax credit because the government considers it a refund of your federal taxes _ even if you owe less than $8,000 in federal taxes.
In other words, if you qualify, buy a house this year and owe and pay $2,000 in federal taxes in 2009, Uncle Sam will send you a check for $8,000.
All of your federal taxes will be refunded, and you'll get a gift of $6,000. If you owe $6,000 in federal taxes and have already paid $2,000, Uncle Sam will send you $4,000. The other $4,000 will cover the additional federal taxes you owe.
The federal government defines a "first-time homebuyer" as anyone who has not owned a home in the past three years.
The tax credit may be applied only to primary residences, including single-family homes, townhomes, condominiums and co-ops.
In Central New York it can take up to two months to complete a home sale. Mortgage lenders are seeing an increased volume of applications and are scrutinizing borrowers' paperwork and property appraisals much more closely.
Unless the Nov. 30 deadline is extended (and many believe it will be), that means first-time buyers should select a property and make an offer by the end of this week to safely meet the deadline.
First-time buyers are advised that the purchase of a home, especially the first one, is a decision that should not be taken lightly.
According to Realtor.com, an average first-time buyer takes at least four months to find a home. So if you are just starting your home search, you may not be able to take advantage of the tax credit unless it is extended.
There are several ways that you can speed up your home-buying process:
Be employed. Before you buy a home, you should have a good track record of employment (at least six months) or be able to demonstrate a continuity of employment. If you do not feel confident about your job, you should put off your decision to purchase.
Get prequalified. Meet with a reputable, experienced (preferably local) lender and find a price range you are comfortable with. Many times you are qualified for a payment that is higher than you are comfortable with. Make sure you collect and provide pay stubs, bank statements and tax returns to demonstrate acceptable income.
Get good credit. Make sure that you have acceptable credit. If you have not paid your bills on time or have not met your financial obligations, you may not be able to purchase a home. You can check your credit score online for free by going to annualcreditreport.com. Also, it is critical that you make no major purchases on credit between the time you apply for your mortgage and closing.
Use a Realtor. Select a realtor to represent you in your purchase. Remember, not all real estate agents are Realtors.
Realtors are licensed professionals who abide by a national code of ethics, belong to a local board of Realtors and usually subscribe to a database listing all participating agencies' properties for sale in the area _ not just theirs. Don't be afraid to ask your agent if these criteria are met.
There has rarely been a better time to begin investing in your future. Interest rates remain at historic lows, prices are affordable and the federal government is providing a powerful incentive to become a homeowner now.
Home ownership is the cornerstone of a solid investment portfolio, healthy communities and a strong national economy.
Your local realtors stand poised to assist you with determining if you are able to take advantage of this once-in-a-lifetime opportunity. Act soon. The deadline is around the corner.
Fox can be reached at email@example.com or 431-2540.
To write for "My turn," contact Daily Star Publisher Tanya Shalor at firstname.lastname@example.org or 432-1000, ext. 214.