Q & A with Dottie Herman

» Featured Columnists | By Dottie Herman | January 22, 2010 8:30 AM ET

Q1 - I am thinking of buying in NYC. My husband works in Long island and I work in Manhattan. I am very unsure about what area I should buy in- any tips for how to decide?

A - For many people in your situation it comes down to finding that right balance between lowering the commute time and living in an area you enjoy.  First you should calculate what kind of a commute would be satisfactory for your husband. If he takes the LIRR to work, perhaps the west side would be better for him given the location of Penn Station.  If he drives, certainly the east side would reduce his commute time.  Start by looking in different neighborhoods that are more convenient for your husband's commute.  This will also show you how far your money will go in different parts of the city.  As you start to hone in on one particular neighborhood, you can focus more intently on specific apartments that work for you.  Before long, you will find the perfect apartment for you and your husband. 

Q2 - My husband and I just moved from NYC to Atlanta. We want to take advantage of the first time homebuyer tax credit if possible so I know we have to move fast. How should we begin our process? Anything we should do before contacting an agent?

A - Now is a great time to start.  You should contact a great agent that is familiar with the county or neighborhood in which you plan to move. Explain to the agent what your goals are for location, price and talk about the tax credit.  Your agent can begin scouring the market for homes that will work for you.  If you don't have a mortgage broker and a local real estate attorney yet, an agent will be able to make recommendations for you but be sure to speak with a loan officer so you can get pre-approved before getting too involved in your search as you want to ensure you are looking within your price range.  It will be important for you to have all the pieces in place so you can take advantage of the tax credit.

Q3 - My wife and I are thinking about buying our first home. We have a flexible payment on one of our credit cards and have about a 15,000 balance which we have elected to pay over time. Does this affect my credit score to qualify for a mortgage?

A - Home Balances on credit cards that reflect more than 10% of your credit limits can have a marginal affect on your credit score. Once these balances start to exceed 30% it will begin to impact your score. Keep in mind we are talking about revolving debt such has credit cards, store cards & gas cards. Using credit cards is a healthy thing for generating good credit, but keep those balances at 10% or under your credit limit on a revolving basis.

Q4 -
My daughter bought a condo and she is not expecting a refund this year but rather to owe taxes. Will her first time homebuyer tax credit cancel that out or will she get an 8000.00 check and then pay her taxes?

A - How the tax credit works is if you owe the IRS money for 2009, when you file your taxes you will supply a copy of your HUD 1 statement (closing statement). However, your daughter should speak to an accountant or tax consultant to ascertain her tax liability and hopefully the tax credit will defer her tax expenses.

Q5 - I currently live in NYC and I want to move to a larger apartment. The apt next door to me seems to be vacant and has been for quite some time. I would like to buy it and break down the wall, etc--how would I go about doing that? Do I have to contact the owner? Building? Both?

A - Certainly before you do anything, you would need to contact the owner and engage in a conversation about purchasing the unit.  Assuming you and the owner come to an agreement on the purchasing terms and the board of the building approves the purchase, you would most likely need to file alternation plans with the board of the building so they may approve the combination and file for permits. In addition, in some cases you may also need to file for a change of occupancy of the building with the city. A licensed contractor can take you through the steps of filing these permits. However, you may want to make the approval of the combination by the board a contingency to close.

If you have a real estate question for Dottie, please send it to;
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best. 

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