There has not been a better time to invest in real estate at least in the last 50 years. Due to the what many call “the great recession”, real estate prices have dropped tremendously. The decrease in prices has become a dream come true for investors and first time home buyers, but has also become a nightmare for the thousands of citizens currently foreclosing their homes as a result of the recession. Despite the decrease in prices, there are now new barriers that may prevent investors from purchasing a property, for example: access to credit, additional requirements, among other factors. Fortunately, it is still possible to take advantage of this great opportunity. The following are a set of tips that may be beneficial to you before looking to purchase a new property.
Do your taxes right
This applies to everyone; especially if you are planning to apply for a loan. Because of the recession, banks are being more careful about granting loans, therefore it is crucial that you declare a sufficient amount on your income tax for the last two years before submitting this information to the bank(s). If you are self employed, it is not wise to deduct too many expenses because it will reduce your gross income. The more you declared, the better your chances of qualifying.
Know what they want
In addition to having good credit and making enough money, banks and condo/co-op boards also want to know how long you have worked for a certain company. The longer you have worked for the same company, the better. Whether you have any existing loans. Whether you can afford to pay the taxes/maintenance and other expenses in addition to the mortgage. They also want you to have enough money in the bank to cover at least a year’s worth of taxes/maintenance. Many factors may influence their decision, although in general you should qualify if the monthly loan payment is a third of your monthly income.
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