Any ideas on how the new Home Buying Credit will work? (mortgage, mortgage)

[ocnymonty]

We closed on April 18th, and we fully intended on cashing in that Home Buying Credit when we itemize taxes this year. I understand it's more of a loan, interest free with a payment schedule of 15 years. Andyone understand how you calculate the credit you will recieve? We closed at $345K, our first home. Is it 10% or $7500?

[le roi]

http://www.google.com/
(for more info)


yes, technically it is 10% of your home's value, but it is capped at $7,500. IIRC you pay back $500 per year to the federal gov't.

[Jamesww]

You need to also check the income qualifications as if you make to much then you will not qualify for the tax credit.

[Bill Keegan]

Originally Posted by ocnymonty

We closed on April 18th, and we fully intended on cashing in that Home Buying Credit when we itemize taxes this year. I understand it's more of a loan, interest free with a payment schedule of 15 years. Andyone understand how you calculate the credit you will recieve? We closed at $345K, our first home. Is it 10% or $7500?

If I understand the program correctly ( and I believe I do) then the price of the house really has nothing to do with it, as long as the house price is greater than $75,000. You will be entitled, (so long as you meet the income limit and "first time buyer" requirements) to a reduction in your tax liability of $7,500. That money must be paid back, starting two years later, $500 per year, with the full amount being due if you sell. That's a quick look at the program. Here. Go to the fed's explanatory web site (http://www.federalhousingtaxcredit.com/index.html - broken link). And call your tax preparer.

[ricardocobos]

You have to be a qualified first time home buyer. A qualified fthb is someone who hasn't declared a mortgage interest deduction on their schedule A for the past three years. Note: someone who has declared mortgage interest on a schedule E for non owner occupied property is still eligible to take the credit. As for repayment; If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.