First-time buyer tips for smooth closing

Just when the party is beginning to show signs of life, do you take away the only punch bowl?

Even though first-time homebuyers are driving the housing market, there has been little energy in the nation's capital to extend the $8,000 tax credit beyond the Nov. 30 deadline.

That doesn't mean that some of the more influential trade organizations in this country have stopped trying to convince legislators that the first-time incentive is key to sustaining any semblance of housing momentum. Representatives from the National Association of Home Builders, along with the National Association of Realtors, believe the tax credit is critical to their members.

October is already here. If a first-time homebuyer did find a home in time to beat the deadline, how much time would be needed to close the deal?

Most lenders say they need a minimum of 30 days to close a loan and many will not guarantee that everything will be wrapped up by Nov. 30. Just to be safe, it's best to get started as soon as possible with as much documentation as possible. The number of applicants will increase as the deadline for the first-time buyer tax credit approaches.

FHA-insured loans can take longer, even with an in-house underwriter. If the lender must send the file to the investor to have it underwritten, the lender is at the mercy of the investor's workload. Underwriting time frames should be shorter now because overall volume is lower, but everyone in the lending industry expects a late tax-credit rush.

A crucial element in getting loans processed and closed in a timely matter is a complete file. If you have spent time only shopping for a home and not compiling your financial package, here is a list of the top five documents to immediately prepare for your lender:

• Copy of driver's license and Social Security card
• Pay stubs (covering most recent 30 days)
• W-2 and 1099 statements for 2008 and 2007
• Copy of 2008 and 2007 federal tax returns with all schedules
• Bank statements for checking, savings, money market, CDs and IRAs (covering past two months) including account number and bank. ...CONTINUED

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