If you plan to take a home buyer tax credit, either as a first-time buyer or current homeowner, you need to get under contract by April 30, 2010 and close by June 30, 2010. Follow these guidelines to avoid missing out on your tax credit.

New Home Tips: 5 Ways to Avoid Losing Your Home Buyer Tax Credit

If you're considering purchasing a home in time to qualify for the federal home buyer tax credit, you probably already know that you're up against the clock. With less and less of a margin for error, you don't want an avoidable mistake to cost you your credit. Here are five ways you can avoid losing your credit.

1. Forget About Short Sales, Foreclosures, and REO

Avoid bank-owned properties, HUD homes, estate sales, and any other transaction requiring the approval of a third party. You have only a couple of weeks to get a fully executed real estate contract and open escrow. Anything that could slow the process must be avoided. New home builders, on the other hand, may have brand-new inventory for sale. Just make sure that any home you choose has a certification of completion or you won't be able to get a mortgage on it.

2. Be Careful When Choosing a Real Estate Agent

This is not the time to use your best friend's daughter who just got her license. Your contract should be structured so that the sellers must perform by the dates you require. For instance, when you make an offer, a smart agent will be cognizant of your time constraints and require that the seller respond within so many hours, not days. This would free you up to make an offer on another property quickly if you need to. The last thing you want is to be down to the wire and at the mercy of a seller because you have to have a signed contract by April 30.

In addition, an experienced agent will get inspectors out quickly and can arrange for things like septic tank pumping and well tests if required. You want these completed as soon as possible. Because you won't be able to start over with a new property if yours fails its inspection, you'll also want the seller to complete needed repairs or else give you a credit at closing.

3. Shop for New Home Loans Early

Shop for your new home loan now. By reviewing Good Faith Estimates (GFEs), you'll get a very good idea of what it will cost to close on your home purchase. New laws require that the estimates mortgage lenders give you must come very close to the actual closing costs. For that reason, don't accept a "worksheet" or "loan scenario" in lieu of a GFE. Only a GFE obligates the lender to honor the fees disclosed; you can't afford last-minute surprises when closing on your mortgage, because you won't have time to shop again and reapply.

4. Get Mortgage Approval, Not Just Prequalification

Today, mortgage lenders underwrite mortgages electronically and can often give you a decision the same day you apply for your home loan. The approval will list the documents needed to finalize your loan approval. If you have them on hand, you should be able to get a formal approval very quickly. That means pay stubs, bank statements (all pages, even the last blank one), possibly tax returns (if you are self-employed or have investment income), divorce decrees, etc. Make sure the lender orders a property appraisal as soon as you have a real estate purchase agreement and a property address.

5. Consider Locking in Your Interest Rate Early

The mortgage rate on your GFE disclosure is not a commitment by the lender unless you lock it in. Locking early protects you from bait-and-switch tactics or market-driven increases. In addition, if your debt-to-income ratios are a bit high, an interest rate increase could cause you to lose your mortgage approval. Locking in a rate can protect you from all of these possibilities. You may lock in your mortgage as soon as you can provide a property address.

By hitting the ground running, you have an excellent chance of snagging your home buyer tax credit before it goes away. Don't miss out on this opportunity to make a sound investment and put cash in your pocket.