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Now is a perfect time for first time home buyers to buy a house. Prices are affordable, and now even more help is available.
For the purpose of this credit first-time home buyer is defined as someone who has not owned a home in the past three years.
The Federal Government has enacted legislation that provides a tax credit of up to $7500.00 for first time home buyers.
If you buy a house between April 9, 2008 and before July 1, 2009 you are eligible for the credit. The amount you are eligible for depends on the price of your home, your mortgage and your income. Most first time home buyers will qualify.
The tax credit works like an interest-free loan. It will be repaid over a 15 year period. For instance if you qualfy for the maximum credit then $500.00 would be deducted from your refund each year for 15 years. People who have a mortgage will have plenty of refund to work with.
For more information visit www.federalhousingtaxcredit.com (http://www.federalhousingtaxcredit.com/ - broken link)
I do not even know why they say it's a tax credit when in fact it's an interest free loan that has to be eventually paid back.
The feds should do what Washington DC does for "first time homeowners" Give a $5000 tax credit to the new homeowner. Obviously Washington DC has a very loose definition of what a new homeowner is (I believe they can only buy a new home every x number of years to qualify for the tax credit and also there are income limits to who could qualify for the tax credit)
I agree aneftp it seems (I shouldn't even say seems) deceptive to call it a tax credit. They did kind of the same thing with energy credits. Although they weren't a loan the lifetime energy credit is laughably low.
Most local governments offer their own programs so some buyers will get quite a lot of help.
Good point stan4. The phase out is pretty high though.
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.
That is my favorite part...sell the house for a loss...you don't owe squat!
it's an interest free loan for anyone who hasn't owned a home for the last 3 years (first time buyers or people who owned in the past but not in the last 3 yrs).
My suggestion to anyone interested in doing this is to take the 7500 credit/loan and use it to prepay your mortgage. That way you reduce the principla you're paying interest on and will have the increased equity to payback the loan when you sell.
Of course this is only a suggestion and should not be considered legal advice.
My suggestion to anyone interested in doing this is to take the 7500 credit/loan and use it to prepay your mortgage. That way you reduce the principla you're paying interest on and will have the increased equity to payback the loan when you sell.
Of course this is only a suggestion and should not be considered legal advice.
True, but if you take that $7500 and make wise investments in your home could you not get the money back that way? And get to enjoy the remodeling?
So if you owned a house but sold it May 28, 2005..... and then bought May 24, 2008..... are you precluded because of a few days?
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