FIRST TIME HOME BUYERS

Are You A First Time Home Buyer?

If you are a first time home buyer and purchased before July, 2009, you qualify for up to a $7,500.00 tax credit.  You would also qualify for this tax credit if you have NOT owned a home over the last three years.  This information links directly to a very reputable lender in the valley.  If you want more information, please contact Nancy Seago and tell her that Nikki sent you.  In addition, if you are just starting your search and need a real estate professional, I would be happy to assist you. 

One of the most exciting new provisions of the Housing and Economic Recovery Act of 2008 is the First-Time Home Buyer Tax Credit. The credit is designed to encourage first-time Home Buyers to go ahead and make the leap to purchase their first homes. Combine this tax credit with the fact that home prices are at historical lows, and indeed it is an ideal time for many first-time Home Buyers to purchase homes.

POINTS OF INTEREST FOR THE USE OF THIS TAX CREDIT

FIRST TIME HOME BUYERS ONLY

• The credit is available for homes purchased between April 9, 2008 and July 1, 2009
• The credit amounts to 10% of the purchase price of the home not to exceed $7,500
• A first-time Home Buyer is defined as someone who has not owned a home in the last three years
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
• The tax credit works like an interest free loan and must be repaid over a 15 year period

HERE IS HOW IT WORKS:
A tax credit is a special provision that reduces income tax liability on a dollar for dollar basis. When filing a tax return, you must include income items, deduction items and the number of exemptions, among other things, to figure your total tax liability. If your total tax liability ends up being $7,500, and you qualify for the full $7,500 tax credit, this credit would be applied and would wipe out all of the tax due. If your employer had already deducted the $7,500 from your pay checks throughout the year, you would receive a tax refund of $7,500.

Does the credit have to be repaid?
Yes, the credit does have to be repaid, so it is really more like an interest free loan. Home Buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a Home Buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. 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.

ARE YOU ON THE FENCE?

Buyers, are you on the fence about purchasing a home?

Well, if you are and you want to take advantage of the higher FHA limits, you need to make the jump now.  As of January, 2009, the FHA limits in Maricopa County will go from $346,250 down to $270,050.  I have heard on good authority that if you’re thinking about buying and you want to go FHA over $270k, you’d better do it now.

I have several lenders whom I could recommend if you are interested.