How to Qualify for the $8,000 Tax Credit

Here are some general guidelines to qualify for the $8,000 Tax Credit:

Eligible Property: Any single-family residence (including condos, co-ops, and townhouses). All principal residences are eligible.

Refundable?: Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of the tax credit will be refunded to the purchaser.

Income Limit: Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).

First-time Homebuyer Only: Purchaser (and purchaser’s spouse) may not have owned a principal residence in the 3 years prior to purchase date.

Revenue Bond Financing: Purchasers who utilize revenue bond financing can use credit.

Repayment: No repayment for purchases on or after January 1, 2009 and before December 1, 2009.

Questions? Contact Jenny Phung at 972-731-0165, email jenny@jennyloans.com, or visit my website at http://www.jennyloans.com/.

What to know before you go house hunting

Would it surprise you to know that your Realtor would prefer to work with clients who have their pre-qualified letters ready rather than working with clients who don't? As a Realtor, it is his or her responsibility to find the perfect house for you no matter how many miles they have driven, how much money spent on gas, and how much time invested into finding you that dream home. So before you start house hunting, here are some financial tips to make sure you're ready to get a mortgage:

1. Make a chart of your current income and expenses. How much can you budget for your mortgage payment every month with principle, interest, taxes and insurance (PITI)?

2. To ensure your loan gets approved, your mortgage should be no more than 38% of your gross income (NOT NET AFTER TAX DEDUCTION), and your total monthly mortgage payment plus all payments based on your current debt should not exceed 48% of your gross income (do not include your utilities). And a smart tip: just because you can get approved for more than your budget doesn't mean you should try to buy more.

3. Be prepared to explain any length of time when you were unemployed.

4. Know your credit. You can get a free credit report once per year for free. Go to http://www.annualcreditreport.com/ and get yourself a free credit report. If you have many delinquencies on your credit report in last 12 months, then it may be difficult for you to get an approval.

5. How much money do you have in reserves? The minimum FHA mortgage requires 3.5% down payment from the sales price. The USDA Rural program does not require any down payment, but you should still have some money in savings. The more reserves you have, the better off you are in dealing with life's many unexpected events.

6. The most important tip is to work with a licensed loan officer/mortgage consultant before you start looking for your new house. They can assess your financial situation and if you're ready, provide a pre-qualification letter that your Realtor will need. You should consider working with someone who has many years of experience, knows and understands underwriting guidelines, and most of all, is dependable and there when you need them. They answer the phone or get back with you within a reasonable amount of time. You should never have to chase down your loan officer.

As a first-time home buyer, there are many uncertainties that lie ahead. You should be able to rely on your Realtor and your mortgage consultant to help you every step of the way.

Don't forget about taking advantage of the $8,000 tax credit for first-time home buyers, including buyers who have not owned property in last 3 years, that gives you cash in your pocket. This program is set to expire November 30, 2009... so ACT NOW!

Questions? Contact Jenny Phung at 972-731-0165, email jenny@jennyloans.com, or visit my website at http://www.jennyloans.com/.