Everyone shops for a reason and that includes everything from groceries to clothes and even houses. While there have been new incentives to get people to start buying property, there are other ways to owning a home.
If your clients are in the position to buy anything then tell them to make 2009 the year they buy a home particularly if they haven't been a property owner for three years. The recently introduced housing incentive package offers a great deal for homebuyers who purchase a home between January 1, 2009, and December 1, 2009. It's stated in the incentive plan that first-time homebuyers who remain in their home for at least three years will be provided a credit for 10 percent of the home purchase price, up to $8,000.
If escrow on the home your clients are currently trying purchase closes after the April 15 tax deadline, then they can apply for an extension provided escrow closes on the property before the extension deadline of October 15. Furthermore, if they have already filed their 2008 return then they can file an amendment to get the incentive credit. The IRS form that they will need to do this is form 1040X.
Other restrictions to this incentive for first-time homebuyers include those that have a modified adjusted income of less than $75,000 or $150,000 (filing jointly). Unfortunately, the credit amount drops as their income rises and so if their income is over $95,000 or $170,000 (filing jointly) then the credit is eliminated.
With the huge inventory of homes available, there are many deals to be had, but keep in mind that those who are willing to put in some elbow grease may reap the biggest return on their investment. Not only will they have less competition to initially purchase the property but they will also increase the property's value by making the improvements.
If your clients are ready to make 2009 the year they purchase their first home then following these 5 keys will help them obtain that goal even without the housing incentive.
Put down at least 20 percent on a home. Even if your clients can get a larger loan, it's not worth the risk. It's suggested that they buy within their means.
Check their credit. By checking their credit your clients can clear up any wrongly reported debt and in doing so they may increase their credit score and afford a better interest rate when they do get a loan.
Clean up their credit. If they do find that there is a delinquency then they need to clean it up and once it's been cleaned they need to make sure the credit agencies have updated their data.
Get prepared. Your clients should gather together all their financial records including two years of tax returns. Having done so can make the loan process go much more smoothly.
Liquidity is vital. If your clients plan to buy a home in 2009 then it's suggested that they don't buy a car before-hand. Recently, television commercials have started campaigns that state that if you buy a car and you lose your job you can return the car in the first year. Even so, your clients shouldn't buy a car. Having cash on hand helps to show that they are qualified to buy at the price they can afford.
With incredibly low interest rates, and a high inventory of homes for sale, it's a buyers market and now is the time to make 2009 the year your clients reach the American dream by owning their own home.