Q: I’m really excited that the prices have come down on Vashon enough that I can finally buy a home of my own.

Ever since my divorce my two kids and I have been at the mercy of landlords and I’m sick of it. Plus, I can’t have pets and the kids really want a dog or cat. My question is this; how do I find a reliable lender in these uneasy financial times? They all seem to offer the same basic interest rates. I applied at my bank but they haven’t really been forthcoming with what the true cost of the loan will be and that makes me nervous.

A: You’re wise to shop around for your loan. These days it’s almost a given that an offer to purchase a home will be accompanied by a pre-approval letter from the buyers lender. It’s always best to have that all sorted out before you make an offer. Interest rates are an important part of deciding on a loan, of course, but you’re right that most lenders, banks, credit unions, and mortgage brokers offer close to the same rates.

What can be very different are your closing costs. I just had a client pre-approved with a lender for 1.5 points. That represents one and a half percent of the loan. Banks will call these points, fees, or other names but they all mean a percent of the loan. In the case of this client that would have cost him $6,375.00. Add to that his pre-paid taxes, insurance and reserves of one kind or another, plus the cost of the credit check and the appraisal, as well as miscellaneous fees the bank charges and his total cost would have been just shy of $10,000. I recommended that he check with other lenders and he found one that charged him less than half that amount. That’s a huge difference!

Find a lender who comes highly recommended and one with whom you feel comfortable sharing all of your financial information. You’ll be working closely with this person so you need to trust them.

Q: I’d like to buy a house but I’ve been told that the $8,000 buyer credit is expired.

I really can’t buy a place without that. Will the government do something like that again? It would be great if they did it before the prices go up and while there are houses for sale in my price range.

A: As it happens, the first time home buyer credit was extended and you have until April 30th to get into a contract to buy a house, and you have up until July 1st to close on the sale. There is even a new provision that allows someone who has been living in the current home they own at least five years to purchase another primary residence and receive up to a $6,500 tax credit.

Also remember that if you don’t owe that much on your taxes the government sends you the difference in cash! You can apply it to 2009 taxes or 2010. There are some income limits to receive the full benefit. You must make $125,000 or less for a single person and $225,000 for those filing jointly. If you make more you get a smaller benefit.

We have an active market right now with new listings coming on the market almost daily. Several of those listings are in your price range so there is reason to hope that you could find a home that will work for you before the April 30th deadline.

I am happy to say that I have sold several homes in the last several months to first time home buyers. The $8,000 benefit was a real help in all of these cases. Because we finally have some inventory in the lower price ranges, these young families as well as many single individuals have been able to buy a home in what has been an expensive and out of reach real estate market.

If you have been on the fence about buying, have your lender figure out for you how that tax credit can help you finally own a home of your own.