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Old 09-11-2008, 07:24 PM
 
Location: SE Michigan
1,213 posts, read 4,238,988 times
Reputation: 674

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my loan officer was telling me about some newly passed tax credit law. I think she said I could get back $7000 on my tax return on top of what I would normally receive if I closed on a home by a deadline and this was my first house purchase (and I satisfy both requirements).

but my understanding is this is not a gift as much as it is an interest free loan on returns in the future.

She said that I would repay $500 of refunds for x many of years until it is paid off.

So it is not like I am getting something extra, just a little sooner.

If I didn't want to take the full amount can you take partial credit. Is the credit mandatory?

She seemed to think it was a great plan.... but I don't get it... I guess I don't understand the value.

What would one do with the money ? Blow it on new furniture, car etc?
Put it in an interest bearing account? Put it on the principal of the home?

Also she gave me the impression that with the new tax write off from home ownership, that I would really not even miss the $500 per year... that the additional tax write off would pay the tax loan by itself.

Please if you can shed some light for me... I would appreciate it.
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Old 09-11-2008, 08:14 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,674 times
Reputation: 249
theres already a post about it please use the search.
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Old 09-25-2008, 06:59 AM
 
Location: Charlotte
12,646 posts, read 13,613,620 times
Reputation: 1679
Quote:
Originally Posted by kcam213 View Post
my loan officer was telling me about some newly passed tax credit law. I think she said I could get back $7000 on my tax return on top of what I would normally receive if I closed on a home by a deadline and this was my first house purchase (and I satisfy both requirements).

but my understanding is this is not a gift as much as it is an interest free loan on returns in the future.

She said that I would repay $500 of refunds for x many of years until it is paid off.

So it is not like I am getting something extra, just a little sooner.

If I didn't want to take the full amount can you take partial credit. Is the credit mandatory?

She seemed to think it was a great plan.... but I don't get it... I guess I don't understand the value.

What would one do with the money ? Blow it on new furniture, car etc?
Put it in an interest bearing account? Put it on the principal of the home?

Also she gave me the impression that with the new tax write off from home ownership, that I would really not even miss the $500 per year... that the additional tax write off would pay the tax loan by itself.

Please if you can shed some light for me... I would appreciate it.
The legislation Congress passed allows homeowners a tax credit up to $7500.00 in the first year they purchase a home. It is an interest free loan for 15 years, the first payment will be due two years from the settlement date. Should you sell the home within this time span the amount will be pro-rated and you will pay the remaining balance at closing from the proceeds from the sale.

I'm not certain what you would do with the money; however, in today's economic climate and as a new homeowner I'm certain many will find some way to leverage an interest free loan to their benefit. I suggest consulting your tax adviser or financial adviser to discuss the benefits as well as negatives prior to accepting the loan.

Hope this helps and good luck, Have fun in your new home!!
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Old 09-25-2008, 09:34 AM
 
878 posts, read 1,846,070 times
Reputation: 460
Quote:
Originally Posted by walidm View Post
I'm not certain what you would do with the money; however, in today's economic climate and as a new homeowner I'm certain many will find some way to leverage an interest free loan to their benefit. I suggest consulting your tax adviser or financial adviser to discuss the benefits as well as negatives prior to accepting the loan.
If nothing else, put it in a CD account. With a $7500 deposit, you could get over 3% interest. That's $225/year, after two years you should have enough gain to just about cover the payment.

Two years later, ladder CDs so that you have $500 coming available every year.

And that's just one super-low risk way to use the $7500.
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Old 09-25-2008, 09:42 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,674 times
Reputation: 249
Quote:
Originally Posted by zman0 View Post
If nothing else, put it in a CD account. With a $7500 deposit, you could get over 3% interest. That's $225/year, after two years you should have enough gain to just about cover the payment.

Two years later, ladder CDs so that you have $500 coming available every year.

And that's just one super-low risk way to use the $7500.
interesting, did you calculate income tax and inflation on top of that?
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Old 09-25-2008, 01:57 PM
 
3,627 posts, read 12,402,826 times
Reputation: 2682
What constitutes a "first home purchase" - I know in some cases it is not as cut and dry as "first time ever" but rather first time in so many years.................................

An interest free loan would be a good thing.
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Old 09-25-2008, 02:15 PM
 
3,627 posts, read 12,402,826 times
Reputation: 2682
Answered my own question - lot of info here

Federal Housing Tax Credit for First-Time Home Buyers: Frequently Asked Questions (http://www.federalhousingtaxcredit.com/faq.php - broken link)
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Old 09-25-2008, 03:00 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,674 times
Reputation: 249
Quote:
Originally Posted by grannynancy View Post
What constitutes a "first home purchase" - I know in some cases it is not as cut and dry as "first time ever" but rather first time in so many years.................................

An interest free loan would be a good thing.
no purchases within 3 years, 36 months
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Old 09-25-2008, 03:55 PM
 
3,627 posts, read 12,402,826 times
Reputation: 2682
But I gather someone who has paid of a loan, say 20 years ago and continued to live in that house and buy a new home to live in would not qualify either.
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Old 10-31-2008, 11:30 AM
 
1 posts, read 2,776 times
Reputation: 10
I need help:

Please, can anyone inform me where do I need to go in order to apply for a Federal Housing Tax Credit for First Time Home Buyers? My condominium closing was April 10th, 2008 [Miami, FL.]. I am 63 yrs old and my income is under $75,000 dollars a year. Do I qualify? Thank you very much. macaronte.
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