First Time Homebuyer Tax credit: Your Free $ Down Payment Expires Soon!
Posted 02-04-2009 at 01:46 PM by GregTraub
For those of you that don’t already know about the First Time Homebuyer tax credit, check out Federal Housing Tax Credit for First-Time Home Buyers: Home . The basic premise of the tax credit is to give those buying their first home up to $7500 as a credit on their taxes. Meaning your normal tax refund could be boosted by $7500! Plus even if you didn’t have $7500 in taxes withheld, the credit can still mean you get the full tax “refund” credit of $7500.
This $7500 can be used in anyway the tax payer deems fit. Check with your tax preparer, but you should also be able to claim the credit today (on your 2008 tax return), get your check ASAP, and use that money towards the down payment, closing costs, or renovation on the home you haven’t yet purchased. As long as you purchase your first home before July 1st this money is yours to take! Today you can finance a home with as little as 3.5% down. What amounts to a $7500 down payment assistance loan means you can use the money as the only down payment needed on a home over $200,000!
As of today, the tax credit does have a repayment provision. Meaning 2 years after you claim the credit you will begin to payback a small part of the credit every year. This isn’t big a deal, as the “repayment” will be coming out of your taxes already withheld, so you won’t see any impact on your take home pay. Instead of getting a $1000 tax refund in 2010, you would get $500 as the other $500 goes to paying back the credit over the next 15 years, all at ZERO interest.
But just days ago the U.S. House of Representatives passed a new stimulus bill that eliminates the repayment provision. The bill is yet to pass the Senate and the alterations to the credit will likely change more before it is fully passed. Some alterations being given high consideration are upping the credit to $15,000 and extending the credit to ALL buyers not just First Time Home Buyers. But no talk of extending the credit beyond July 1, 2009 has come up. So if you are looking to purchase your first home anytime in the next few years, do it before July 1! Know that the process of finding a home can take weeks or even months, and the closing of a home will take 30-45 days. Time is running out quickly, especially if you are looking to purchase a short sale property in particular (which can take 3-4 months to close) today is the latest you should be starting the home search.
The bottom line? The government is giving you money to buy a home until July 1 2009. USE IT!
-Greg Traub
My Central Florida Home Expert
This $7500 can be used in anyway the tax payer deems fit. Check with your tax preparer, but you should also be able to claim the credit today (on your 2008 tax return), get your check ASAP, and use that money towards the down payment, closing costs, or renovation on the home you haven’t yet purchased. As long as you purchase your first home before July 1st this money is yours to take! Today you can finance a home with as little as 3.5% down. What amounts to a $7500 down payment assistance loan means you can use the money as the only down payment needed on a home over $200,000!
As of today, the tax credit does have a repayment provision. Meaning 2 years after you claim the credit you will begin to payback a small part of the credit every year. This isn’t big a deal, as the “repayment” will be coming out of your taxes already withheld, so you won’t see any impact on your take home pay. Instead of getting a $1000 tax refund in 2010, you would get $500 as the other $500 goes to paying back the credit over the next 15 years, all at ZERO interest.
But just days ago the U.S. House of Representatives passed a new stimulus bill that eliminates the repayment provision. The bill is yet to pass the Senate and the alterations to the credit will likely change more before it is fully passed. Some alterations being given high consideration are upping the credit to $15,000 and extending the credit to ALL buyers not just First Time Home Buyers. But no talk of extending the credit beyond July 1, 2009 has come up. So if you are looking to purchase your first home anytime in the next few years, do it before July 1! Know that the process of finding a home can take weeks or even months, and the closing of a home will take 30-45 days. Time is running out quickly, especially if you are looking to purchase a short sale property in particular (which can take 3-4 months to close) today is the latest you should be starting the home search.
The bottom line? The government is giving you money to buy a home until July 1 2009. USE IT!
-Greg Traub
My Central Florida Home Expert
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