Q: The interest rate on the mortgage on my home is 5.9 percent. I was thinking of moving this year, but I would like to see if I can refi first. My credit has been better, but I am working on it. I would like to have a lower payment so I can bank the extra.

A: Mortgage rates are incredibly low. Much lower than your rate. If you’re thinking about refinancing, I can assure you this is the best time to go for it.  continue reading »

Q: I am looking for a home and my agent told me to go to my bank and get pre-approved first. What should I bring with me?

A: Your lender will check your credit, so you don’t need to have your credit score ready, but there are many items that a mortgage lender will need to process your loan, including: continue reading »

Q: My uncle wants to sell me his house in Mayfair for $80,000. I think it is too much for his house because it needs so much updating. You know… shag carpet, paneling and the whole ’70s vibe. Zillow says the house is worth $52,000! I do think it is worth more, but how can I find out exactly how much the home is worth?

A: You can and should find out how much the home is worth if you plan on buying it. While websites like Zillow can sometimes be good, they aren’t always accurate. You have a few better options. continue reading »

Q: My friend is buying a house in Rhawnhurst next week. He is only putting $5,000 down, and is telling me that he is going to be paying less now he’s paying in rent. And then he’s getting $8,000 back in his taxes, so it’s like he’s getting paid to move. How is that possible? And can I do it too?

A: Owning a home sometimes can be cheaper than rent in some areas of the Northeast, so it’s quite possible, especially with the interest rates so low. It is one of the few legal tax shelters available. You can deduct interest payments, as well as property tax payments from your income tax. You can also deduct points paid for your home loan as well. continue reading »

Q: I recently sold my house. In this market you would think that would be a good thing, but now I can’t buy the house I wanted because I did not get approved for the next mortgage. And it turns out I have to rent. I am regretful, but how was I supposed to know that would happen?

A: You should have gotten preapproved before putting your home on the market. Then you would have known. I asked Stan Reinford from Bank of America Home Loans if he has run into this problem. continue reading »

Q: My boyfriend and I are looking for a house together. I have good credit, but his credit score is bad. We are thinking about going to credit counseling before applying for a mortgage. How long do you think it will take to repair his credit? Do you think we will make the June tax credit deadline?

A: Most mortgage banks and brokers are looking for credit scores in the 600s, so how long it will take to repair your boyfriend’s credit really depends how low his credit scores are. It could take a couple months or a couple years, depending on the severity of the situation. continue reading »

Q: What documentation do I need to have to apply for a mortgage?

A: Mortgage lenders need lots of proof to be sure they are making a safe bet on you paying your mortgage. Here is a list of what you need to show:

• W-2 forms — or business tax return forms if you’re self-employed — for the last two or three years for every person signing the loan.
• At least one pay stub for each person signing the loan.
• Account numbers of all your credit cards and the amounts for any outstanding balances.
• Two to four months of bank statements for both checking and savings accounts.
• Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.
• Addresses where you’ve lived for the last several years.
• Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
• Copies of your most recent 401(k) or other retirement account statement.
• Documentation to verify additional income, such as child support or a pension.
• Copies of personal tax forms for the last two to three years.

This list may not contain everything that the mortgage lender will ask for, but it’s a start.

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.

Q: I’m a first-time buyer. First, how do I get the $8000 tax credit? Second, can I use it for the down payment?

A: The Dec. 1, 2009 deadline to purchase a home in time to qualify for the $8000 First-time Homebuyer Tax Credit is fast approaching. To add pressure to the time crunch, mortgage applications are up and lenders will be trying to close thousands of loans by Dec. 1. To make it even more challenging, because of changes in mortgage regulations, it is taking lenders approximately 45 to 60 days to close their loans. continue reading »

Q: I am buying a house in Mayfair the seller got at a Philadelphia Sherriff’s Sale in May. When I signed the contract in June, my agent said we would make settlement Aug. 14. I gave notice to my landlord that I would be out by Aug. 31. Two days before we were supposed to make settlement my agent called me and said that the mortgage company won’t let us settle until Sept. 4! Apparently there’s some FHA rule about how long someone can own a house before selling it. What can I do? I have to be out Aug. 31! continue reading »