At the risk of the headline being too long, picking your lender may be just as important as selecting your house!  I learned early on that if I’m working with buyers who are looking for a new home, they get pre-approved or pre-qualified FIRST before we ever go look at a house.

What’s at risk?  What if the buyer falls in love with a house, but finds out it’s $30,000 more than the lender says they can afford?  What if their credit score is worse than they thought - maybe there’s a hidden judgment from a forgotten car your buyer once co-signed on a loan for their nephew.  If these happen, they will be unable to buy a house right away.  If these happen, you want to find a lender who can tell you how to FIX IT.

Mickey Koch of Shorewest Realtors in Milwaukee offers some tips on finding a good lender,

1. Tell the lender what you want to spend every month on your mortgage, taxes, and insurance. Don’t forget about private mortgage insurance if you don’t have 20% down. A great lender will coach you on what price range to be looking in so you don’t leave your “comfort zone” for how much you want to pay each month.
2. Ask them up front what their costs are and have them put them in writing. READ THAT DOCUMENT! And understand it.
3. Set up a face to face meeting with your lender and bring all of the required documentation ASAP. Don’t put this off.

Great advice, all of it!

There’s one lender on Facebook who I haven’t blocked.  He does talk about mortgages about once every two weeks to once a month like this,

Hey Facebookers….rates are starting to move north, don’t miss your chance to lock in a low rate on a refinance or purchase. Contact me with details!

But he also talks about other things like his car breaking down or family picture day.  It’s the real him who happens to work with lending.  On my own Facebook site, I don’t talk about real estate a lot.  Yes, I do discuss it like anyone else would talk about their own jobs, but I don’t hammer people over the head with it.  I want to be sincere.  I want my Facebook friends to be my real friends, not just viewed as clients or customers.  I fear that I’m too casual, though. I need to listen more to the real social networking experts. Whether you’re a lender, a real estate agent, or just someone who offers a product or service, Sarah Dopp’s advice is good.

1) make sure that EVERY SINGLE THING you put out to the world supports that lovable, human image that you have of yourself.

2) make sure whatever you say is put into words that you would actually say out loud to another human being in person.

If it doesn’t pass those tests, don’t write it.

I’ll cheer to that!  Be careful with how you market yourself on social networks.  People are watching, listening.  And then they may not.

For most folks, the idea of reading a credit report isn’t all that appealing and it’s made even less desirable through the steps you have to complete just to get your hands on it.

I signed up for a free credit report a few years ago and after jumping through several hoops, finally had the massive document ready to print.  I was deeply disappointed then to see that while all my credit pluses (and one or two minuses) were there, no score was to be found anywhere.  That’s where they get you… you get your report FREE but have to PAY for the score.  Ay yi yi…

The Federal Trade Commission offers some great advice on how you can obtain your credit report and credit score here, but here are the details that get to the heart of it:

To order, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is on the back of this brochure; or you can print it from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You are entitled to get a free report each year.  Beware of sites that try to charge you for them if you don’t cancel after a certain amount of time.  And remember, no one else can get it unless you give them permission (which many employers do, as well as anyone you want a loan from, e.g., credit card companies, car loans, etc.).

About 20 years ago, buyers were told to consider their future income when they purchased a house.  For example, if they qualified for a $100,000 loan (a lot of money back then), but wanted to keep the purchase price around $85,000, they were encouraged to go ahead and spent the full $100,000 based on anticipated raises.

Yes, my first Realtor told me that.

However today I advise buyers of the exact opposite.  So how can really tell how much home you can afford?  My advise is you could anticipate what your monthly mortgage payment would be on the house you think you’d eventually like to buy.  Pay your regular rent, but pay yourself the different in a savings account of what that future house payment will be.

You will be able to save ahead for down payment and closing costs this way, while getting a solid reality check on whether you can afford that mortgage payment.

Another rule of thumb… make sure your house payment doesn’t exceed 25 percent of your income.  Okay, perhaps up to 32 percent might be okay but anything above that could be dangerous to your financial health.

Approach your ability to pay with plenty of skepticism, save ahead in case of emergencies, and don’t forget to plan for other expenses that go along with home ownership.  If you’ve already done this, consider buying now so you can take advantage of the $8000 tax credit being offered by the feds.  You must have a home under contract by April 30th and close by June 30th to qualify.

Home maintenance is so much more than changing your furnace filters every month, mowing the lawn, and closing your crawl space vents in the winter and opening them in the summer.  You also need to keep your refrigerator coils clean, clean around the dryer vents, get your chimney inspected, and much more.  CNN Money provides a great article with year-round maintenance tips, including:

Inspect your roof. Grab some binoculars and look for loose shingles, mold, mildew, or cracked chimney mortar. Catch problems early and you may avoid spending $2,000 to $12,000 (and up) for a roof replacement.

Check your attic for holes or thin spots in the insulation, and make sure the caulking around doors and windows doesn’t leak. Keep in mind that your attic should be only 5° to 10° warmer than the outside air; any hotter and you could develop ice dams on your roof, which can cause water leak.

There are dozens of great ideas in this article and if you have tens of thousands of dollars (or hundreds of thousands) invested in your home mortgage, pay attention and do what needs to be done to preserve your asset!

Photo by Collin Anderson via Flickr Creative Commons.

When it comes to preparing your taxes, you want to be careful. It’s not just about avoiding a tax audit. In fact, you might need to overcome some assumptions when you are ready to file. And, whether you file yourself, or have a tax professional take care of it, there are a few things to keep in mind. Roni Deutch, “The Tax Lady” offers some insight into items that you might overlook when preparing your taxes. As you get your 2009 tax return together, and as you plan for taxes in 2010, consider The Tax Lady, and keep these 5 things in mind:

1. Changes to your family: Childbirth, college, having your parents move in, marriage and divorce can all affect the tax breaks you are eligible for.

2. Home changes: When you move, there are deductions associated with your situation. And don’t forget the homebuyer tax credit.

3. Job changes: All things related to the job search can affect your tax return, especially with rules for unemployment benefits.

4. Major purchases: If you made a large purchase, let your tax preparer know. It may be nothing, but it may also impact your situation.

5. Bankruptcy: Your taxes are filed differently, depending on the kind of the bankruptcy you have. Be sure to have someone knowledgeable help you this.

The E*Trade baby strikes again, this time reminding us all that the lottery isn’t, in fact, a retirement plan.

Happy Friday!

2010 is going to be an interesting year for taxes. There are a number of tax breaks available that haven’t been available before. Here are two home-related tax moves for you to consider in 2010:

1. Buy a Home

The first time home buyer tax credit has been expanded and extended so that you can get the $8,000 first time tax credit until the end of April. Additionally, if you already own, you can get up to $6,500 when you buy. If you are planning to buy in the next couple of years, this might be the year to do.

2. Green Home Improvements

If you are thinking of making your home more energy efficient, 2010 is your year. There are tax credits available for putting in solar home heating systems, replacing your windows, adding insulation, and more.

Plan out the year ahead so that you can do your best to reduce your tax liability. Figure out what you want, and then decide how you can make it work within your budget.

One of the goals many people have, whether it is for this year or for some point in the future, is to buy a home. However, many neglect to save up for a down payment. This is because a couple of years ago, you could buy a home without a down payment. The game has changed, though, and you need to be aware that a down payment is a necessity in the current climate. (In fact, such common sense should never have been abandoned in the first place.)

At any rate, it is wise to plan ahead to save up for a down payment. You should figure out your price range for a home, and then decide on your down payment size. You will need at least 3.5% if you are getting a loan through the FHA. If you want a different loan, though, you may need between 5% and 10% of your home’s purchase price. A mortgage lender or broker can help guide you in some cases.

This means that you will have to save up thousands of dollars. If you are buying a home for $180,000, you will need $6,300 if you go with the FHA loan. For a 10% down payment, it will require $18,000 ($9,000 for 5% down). You can see how planning may be required.

You should save up using some sort of high yield savings account so that you get a little extra in terms of interest. Figure out where you may have to cut back in order to save up a monthly amount of money, depending on your time frame. For instance, if you want to save up a 5% down payment in a year, using our $9,000 scenario, you will need to set aside $750 a month. This can also serve as a good gauge of whether or not you are ready to take on the costs of home ownership.

In the end, buying a home is a big financial commitment. You really should be ready for it.

When it comes to getting a mortgage, you want to make sure that you are getting a good deal, and that you are choosing a mortgage lender that can help you through the process. This can also be helpful when you are looking to refinance. As you choose a mortgage lender, it is a good idea to shop around a bit first. Chris Bibey, at the Bankruptcy & Foreclosures blog, offers three tips that can help you as you choose a mortgage lender:

1. Consider reputation: Look for a mortgage lender with a good reputation. You can usually find information on banks and brokers. Get references from friends and relatives.

2. Look for a low mortgage interest rate: This is probably the most important aspect of your home mortgage loan. Shop around for a mortgage lender offering a low rate. You can also look for other helpful amenities like reduced closing costs. You should also consider a mortgage lender that is knowledgeable about different programs.

3. Don’t be too hasty: Even though you may want to move through quickly, make sure you take some time to carefully review your mortgage financing options, and choose the mortgage lender you are most comfortable with.