Posts Tagged First Time Home Buyers
It’s official! Congress has approved an extension of the $8,000 tax credit for first-time home buyers to sales contracts entered into by April 30, 2010 and closed by June 30, 2010.
This is good news for all those that weren’t quite ready to buy a home this month. Something to think about if you are expecting a tax return in the first part of the year that you would like to use for a down payment.
And in even bigger news, along with extending the first-time home buyer tax credit, Congress has added an additional $6,500 tax credit for owners of existing homes who are looking to purchase a new home for their primary residence. It must be a move-up in home, but still is a great deal to anyone looking to buy a nicer home than they currently have.
And in more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples.
So more people can take advantage of a tax credit next year, new and repeat home buyers alike.
Related articles by Zemanta
- Realtors Want Congress to Tweak Tax Credit Timeline (blogs.wsj.com)
- April’s Home Sales Jump on Tax Credit. Will Congress Renew It? (dailyfinance.com)
- Tax Credit Extension? Don’t Bet the House On It (blogs.wsj.com)
The government has given homeowners, and potential homeowners some ways to save on their taxes this year. Here are just a few of them:
Buy a new home
If you are a first-time home buyer you are eligible for up to an $8,000 tax credit when you file your taxes for 2009. This credit only has to be paid-back to the government if you sell your home within 3 years of buying it.
P.S. If you haven’t owned a home in the past 36 months you are a considered a “first-time home buyer”.
Even if you are not a first-time home buyer, but are buying a new home this year, you can write-off any points you pay to a broker or to buy-down your interest rate.*
Again, you can write-off any points you pay to a broker or to buy-down your interest rate while enjoying a lower payment through current low interest rates (the lowest they’ve been since World War II).*
The government is offering tax breaks for sprucing-up your home. Congress issued a credit up to 30% of the cost of installing a geothermal heat pump system in your home. Also, the purchase and installation of a solar water system is eligible for a 30% tax credit.
Homeowners buying foam sealants, caulk and weather stripping are eligible for up to $1,500 in credits for improving the energy efficiency of their home.
Install fuel cells in your home and the government will kick you back 30% of your costs up to $1,500 per 0.5 kilowatts of power capacity. The more power you produce, the more you get back.
Add new, energy efficient window and doors to your home. The government will cover 30% of purchase and installation costs up to $5,000 for windows, doors and roofs that improve energy efficiency.
Looking beyond the obvious mortgage interest write-off could save you lots of money come next April.
Now here is an idea I wish they’d adopt here in Salt Lake City. The Missouri Housing Development Commission is helping first-time home buyers by advancing, in cash at closing, $6,750 of the $7,500 federal tax credit for first-time home buyers to use as their down payment. With FHA this is enough to purchase a $225,000 home.
I was pondering this out loud to whoever would listen to my crazed mumblings last year when the tax credit was first announced: “How is giving someone $7,500 back in April of this year (or April of 2010 if the home is purchased this year) going to help someone with no down payment get a house today? They still don’t have a down payment today.”
Well the folks in Missouri got it right. This is granted as an interest-free loan that the home purchaser repays when they get their tax return, or they can repay it over 10 years with interest.
How has it worked? This month 30 buyers have reserved their share of this money and the commission has enough set aside for 590 buyers.
This helps to spur the economy (at least locally) because it puts back to work all those associated in any respect with the housing industry, right down to the Home Depot employee.
For Salt Lake City, UT today’s average mortgage rates are as follows:
30-year fixed: 5.125%
15-year fixed: 4.75%
Conforming Jumbo 30-year fixed: 5.750%
FHA 30-year fixed: 5.00%