HOMEBUYER TAX CREDITS - ACT NOW! Time is running out to take advantage of the real estate tax credit. From a timing perspective, you need to have a home under contract by April 30, 2010, and you must be able to close on that home by June 30, 2010. There are several ways that home buyers can take advantage of the tax credit: 1. Tax Credits for Existing Homeowners - If you own a home now, and have lived in one home for five consecutive years out of the last eight, you may be eligible for a tax credit of up to $6500! The new home you buy must be established as your primary residence. But, you are not required to sell your existing home. Also you can purchase a new home that is lower in value than your existing home. So, you may be eligible if you're at a point where you want to downsize. 2. Haven’t Owned a Home Lately? - If you don't own a home right now, but you have owned one withint the past three years, you may be eligible for up to an $8000 tax credit. In this situation, you would be treated as a First Time Homebuyer. 3. First-Time Home Buyers - If you’re considering your first ever home purchase, you may be eligible for up to an $8000 tax credit. You'll need to explore the specifics, but here is a summary of how the tax credit works: A qualified home is one which will be your principal residence with a purchase price of less than $800,000. Vacation homes and rental properties would not qualify for the tax credit. And, there are rules about income, too.
The tax credit is a refundable credit. Therefore, if the amount of income taxes you owe on your 1040 Federal Income Tax form is less than the credit amount you qualified for, you will receive a check from the government for the difference. All qualified homebuyers can take the tax credit on either their 2009 or their 2010 income tax return. If the home is purchased in 2010 but you want to use the tax credit against your 2009 taxes due, you can file an amended 2009 income tax form. Keep in mind that if you sell the home, or it is no longer your principal residence within three years of the purchase, the tax credit must be repaid. There are a number of ways to take advantage of the Tax Credit, and it is important that you closely follow the guidelines to make sure you are eligible and to apply for the credit. It could be just the thing you need to make that next move. Call me at 615-319-9294 or send an email. Let's review your situation to see how the tax credit can help you!
GOVERNMENT-BACKED LOANS Government-backed loans are available for those who either do not qualify for, or who choose not to take advantage of the tax credit. FHA loans usually offer home buyers more liberal criteria in qualification requirements, smaller down payments and fixed and adjustable rates. Because these loans are insured by the Federal Housing Administration, home buyers must meet certain FHA guidelines. VA loans offers long-term loans with little or no down payments, flexible qualifying standards, and sometimes lower rates to eligible veterans. These loans are backed by the Department of Veterans Affairs.
Fixed Rate Mortgages offer interest rates that do not change, and you know exactly what your principal and interest payment will be each month. The payments do not change because the interest remain remains the same throughout the term of the mortgage. Adjustable Rate Mortgages (ARMs) offer a lower interest rate at the beginning, but adjusts at specific intervals according to the terms of the mortgage, and the amount of that adjustment is based upon an “index”. In some states the Easy Start Program is available in conjunction with any government loan (FHA or VA). This program allows for the seller to pay the buyer's mortgage interest for up to 6 months as a part of the seller’s concession. This program is designed to provide relief for those who find themselves in a relocation situation, are about to start new employment, or who otherwise might be caught with an existing mortgage payment on a house that has not yet closed.
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