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Old 09-04-2008, 07:17 AM
 
11 posts, read 52,879 times
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Hi All.

First time poster. My gf and I are buying a house this year. We are first time home buyers. My income is 105,000/yr and hers is 50,000/yr. We are getting the mortgages together i.e. both signing everything and using our joint income in order to qualify. The question is because I make too much money to qualify for the full tax credit(>75,000) but she technically would be elgible filing as a single individual if she would be able to claim the 7500 tax credit on her tax return. Or would they look at that as a joint purchase and disqualify us for the full amount because we bought it together. Thanks in advance!
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Old 09-04-2008, 05:40 PM
 
Location: Cary, NC
1,036 posts, read 3,627,833 times
Reputation: 503
You are likely out of luck.... but really the best option is to talk to a CPA. This is a new rule in effect this year and no one on here has (or will have until Spring 2009) any practical experience with this.
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Old 09-05-2008, 04:53 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,965 times
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here is the deal. yes she can claim that on her tax return and it will be issued to her as a refund. it is not a traditional loan. you can not use it as a down payment.

to qualify: the property has to be purchased after april 08 and before july 1 09. she has 15 years to repay it or when the house is refinanced or sold. you have to be a first time buyer or not have owned anything for at least 3 years. if you purchase after dec 31, 08 and before july 1, 09; you can claim it on your 08 returns.

this is not to be used as a down payment. the only real application i see is to pay back a person loan to someone that lent you a down payment.

now i see why the republicans where against this and why nobody understood why bush still signed it through.

it serves no purpose. maybe to help with payments as a personal loan. but really doesn't serve a purpose. yes this was all confirmed by a CPA.
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Old 09-05-2008, 05:20 PM
 
11 posts, read 52,879 times
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Thanks for the feedback. We don't need it for the down payment. We would just treat it as an interest free loan to pay off her higher interest student loan debt. I think in this case it would have its advantages. We understand that it'd need to be paid back.
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Old 09-05-2008, 06:03 PM
 
397 posts, read 734,700 times
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Quote:
Originally Posted by brokerdave View Post
this is not to be used as a down payment. the only real application i see is to pay back a person loan to someone that lent you a down payment.

it serves no purpose. maybe to help with payments as a personal loan. but really doesn't serve a purpose. yes this was all confirmed by a CPA.
I would think an interest-free "loan" of $7500 payable over 15 years ($500/yr) might prove helpful in replacing an ugly/worn/old kitchen counter; furniture for an empty room; replace an oil burner (and get tax credit!)...I can see lots of good things to spend the "loan" on.
But, you'll only see the full $7500 if your tax is overpaid to begin with! If your tax is, say $10K and your w/h only $3K then you'll only "clear" $500 but still have to pay back $7500...so it would have been used to pay your taxes!
But $7500 interest-free loan paid over 15 years can't be all bad, can it?
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Old 09-05-2008, 09:02 PM
 
Location: Southeast Georgia
65 posts, read 215,894 times
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For those with PMI, I can see it as being useful to help pay the loan down some and get closer to the 80%LTV to get PMI dropped off. If you're within $7500 of reaching 80%LTV, then this could not only be a tax free loan, but also pay you in the form of getting rid of PMI and saving you the money you would've been paying for it along with reducing your principle and the interest savings that come along with that.
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Old 09-05-2008, 09:44 PM
 
Location: Denver
3,139 posts, read 6,905,145 times
Reputation: 2907
You and your GF are buying a house?

Wow.

Seriously man I would reconsider doing this unless you are married. Because once you two "tie the knot" and I don't mean get married I mean "tie the knot" of buying a house together. Because you are basicly getting married. If you break up things are going to get real crappy.

You need to sit back and ask your self what is going to happen if you buy this house with her and you break up.

Who is going to move out?

What if she leaves you for another man and stops paying her half of the mortgage. Can you make the payments to protect your credit?
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Old 09-06-2008, 06:44 AM
 
11 posts, read 52,879 times
Reputation: 12
I hear what you're saying. But at this point marriage is just a formality. We'll be engaged shortly and married shortly after that. We just found a house that we love and wanted to jump on it. So we're kind of doing things alittle backwards. I'm not worried about the relationship not working. But i appreciate what you're saying. Thanks.
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Old 09-07-2008, 06:13 AM
 
Location: Denver
3,139 posts, read 6,905,145 times
Reputation: 2907
Cool man! Good luck with your house hunt I wish you two the best!
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Old 09-07-2008, 08:29 AM
 
11 posts, read 52,879 times
Reputation: 12
Thanks!
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