The first-time homebuyer tax credit has been getting a lot of publicity lately.  Although it’s pretty easy to qualify, there are still some guidelines which must be followed.

First, and probably the most important, you must be a FIRST-TIME HOMEBUYER.  So if you married recently and your spouse owned a home previously, you can’t qualify for the credit.  BOTH of you must be first-time homebuyers.  How the Federal government defines this is someone who hasn’t owned a home in the previous three years.  This must be calculated to the date of the sale of the previous home.  For example, if you are buying a home and closing the home purchase on March 31, 2009 but you sold a previous home in April of 2006, you wouldn’t qualify.  You’d have to wait till after the three year anniversary of the home sale.

Let’s say that you are a first-time homebuyer but you want to buy the house as an investment and rent it out.  Sorry, once again, you don’t qualify.  The tax credit goes to those who are buying the home as their own residence.

Once you purchase the home and claim your $8000 tax credit, you must live in the home for a full three years in order to keep the credit.  If you sell before the three year anniversary of the purchase, you will have to repay the credit.

The credit is a once in a lifetime opportunity.  There has never been a credit like this before and there likely will not be one again, at least in our lifetimes.  Take full advantage of it and buy a home before December 1^st of this year.  Free money.  $8000 to spend on the home or on a great vacation.  Hurry.  It’s too good to pass up.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

The mind boggles!!  $8000 in free cash, very few strings attached, from my favorite uncle, Uncle Sam.  I’m sure you’ve already spent this money in your mind but here area a few more suggestions related to home ownership.

Let’s say you are short of cash for the down payment but you have a blood relative who would “gift” you the money if you promised to repay them some time in the future.  If you were buying a home on an FHA mortgage, you would need 3.5% of the purchase price in down payment money.  For $8000, you could buy up to a $230,000 home (assuming you qualified for that much monthly payment) and take a loan from uncle/aunt/grandma/mom.  You could then collect your $8000 tax credit from Uncle Sam and pay them back this year.    If you’ve read some of our other blogs, you know that the closing costs can be paid by the seller.  You could get into that lovely home for FREE.

Or let’s say you are interested in a home but it needs some redecorating such as new carpet or flooring throughout ($4000), new paint in all the rooms ($300) and some new appliances in the kitchen ($3000).  None of these fixes would make it hard for you to get mortgage approval but they might make it hard for you to LOVE your home.  Buy the home, claim your $8000 tax credit and use the cash to create a home you LOVE.  Put in the carpet, repaint the rooms in custom colors and buy those stainless steel kitchen appliances.  Then sit back and enjoy.

Or let’s say the home is pretty darn nice but the yard isn’t.  It’s been neglected, never had any landscaping or fencing for the kids and the dog, and the deck needs to be removed and rebuilt.  Let’s plan a new deck ($5000) and let’s get some landscapers out there to put in the perennials, replace sod and add a tree or shrub or two ($3000).  From ugly to lovely.  There’s lots more ideas too but these should get you thinking of the POSSIBILITIES for that lovely $8000 First-Time Homebuyer Tax Credit.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Recently, I had two homebuyers come to our seminar for First-Time Home Buyers who plan to buy a home this year.  They want to take advantage of the record-breaking drop in home prices, the record-breaking low interest rates and the first time ever tax credit for first-time homebuyers.

They asked me if they could split the tax credit.  Well, at the time, I didn’t know the answer to that question but God Bless America.  The IRS website at IRS.gov had an answer for their question.  Of course, you know the IRS!! The answer WAS NOT short but basically it said this.

Of course you can split the one-time $8000 tax credit.  But you should be sensible about it.  For example, if you and a fiancé bought your first home together, and you each paid ½ of the down payment, you could split the tax credit 50/50 each taking ½ of the credit.  Or let’s say you paid cash for a home and you contributed $25,000 and your partner contributed $75,000 towards a $100,000 home.  You could split the credit taking 25% or $2000 for yourself and giving 75% or $6000 for your partner.

Or let’s say that your partner has been out of work for a year and thus doesn’t owe any taxes but you are self-employed and will owe $6000 at the end of the year.  In this case, it may make sense for you to take the whole tax credit to offset your taxes.  You would still get a check for the difference of $2000.  You can make the credit work for you…just have some sensible explanation to give the IRS.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

The mind boggles!!  $8000 in free cash, very few strings attached, from my favorite uncle, Uncle Sam.  I’m sure you’ve already spent this money in your mind but here area a few more suggestions related to home ownership.

Let’s say you are short of cash for the down payment but you have a blood relative who would “gift” you the money if you promised to repay them some time in the future.  If you were buying a home on an FHA mortgage, you would need 3.5% of the purchase price in down payment money.  For $8000, you could buy up to a $230,000 home (assuming you qualified for that much monthly payment) and take a loan from uncle/aunt/grandma/mom.  You could then collect your $8000 tax credit from Uncle Sam and pay them back this year.    If you’ve read some of our other blogs, you know that the closing costs can be paid by the seller.  You could get into that lovely home for FREE.

Or let’s say you are interested in a home but it needs some redecorating such as new carpet or flooring throughout ($4000), new paint in all the rooms ($300) and some new appliances in the kitchen ($3000).  None of these fixes would make it hard for you to get mortgage approval but they might make it hard for you to LOVE your home.  Buy the home, claim your $8000 tax credit and use the cash to create a home you LOVE.  Put in the carpet, repaint the rooms in custom colors and buy those stainless steel kitchen appliances.  Then sit back and enjoy.

Or let’s say the home is pretty darn nice but the yard isn’t.  It’s been neglected, never had any landscaping or fencing for the kids and the dog, and the deck needs to be removed and rebuilt.  Let’s plan a new deck ($5000) and let’s get some landscapers out there to put in the perennials, replace sod and add a tree or shrub or two ($3000).  From ugly to lovely.  There’s lots more ideas too but these should get you thinking of the POSSIBILITIES for that lovely $8000 First-Time Homebuyer Tax Credit.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

The first-time homebuyer tax credit has been getting a lot of publicity lately. Although it’s pretty easy to qualify, there are still some guidelines which must be followed.

First, and probably the most important, you must be a FIRST-TIME HOMEBUYER. So if you married recently and your spouse owned a home previously, you can’t qualify for the credit. BOTH of you must be first-time homebuyers. How the Federal government defines this is someone who hasn’t owned a home in the previous three years. This must be calculated to the date of the sale of the previous home. For example, if you are buying a home and closing the home purchase on March 31, 2009 but you sold a previous home in April of 2006, you wouldn’t qualify. You’d have to wait till after the three year anniversary of the home sale.

Let’s say that you are a first-time homebuyer but you want to buy the house as an investment and rent it out. Sorry, once again, you don’t qualify. The tax credit goes to those who are buying the home as their own residence.

Once you purchase the home and claim your $8000 tax credit, you must live in the home for a full three years in order to keep the credit. If you sell before the three year anniversary of the purchase, you will have to repay the credit.

The credit is a once in a lifetime opportunity. There has never been a credit like this before and there likely will not be one again, at least in our lifetimes. Take full advantage of it and buy a home before December 1st of this year. Free money. $8000 to spend on the home or on a great vacation. Hurry. It’s too good to pass up.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs. “Simple answers to home ownership questions”.

It’s a great country we live in and you can reap the benefits this year.  Congress has passed a new law which permits first time homebuyers who earn less than $75,000 (individual) or $150,000 (couple) to qualify for a special tax credit.  If you buy your first home (must not have owned a home in the previous 3 years), you can qualify for a gift from your government of up to $8000. 

The tax credit is 10% of the purchase price of the home or $8000, whichever is less.  This credit not only reduces your tax liability for the year in which it is used but also serves as a real credit.  That is, if you don’t pay enough taxes to use the full $8000, the government will mail you a check for the difference.  You could claim the credit this year, even if you have already filed your income tax return by using the new form, Form 9465, to request the credit.

So what are you waiting for?  Home prices have dropped the most they have ever dropped in recorded real estate history, mortgage interest rates are at record lows of 5% and you can get paid $8000 by your government when you buy your first home.  Is this a great deal or what?

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Did you know that one of the most powerful tools for first time homebuyers is right here? We offer free homebuyer classes in the Twin Cities MN. We’ve been teaching these classes for over ten years.  Hundreds of our students have graduated and had a successful experience buying their first home.  Our classes have much more to offer than any online class ever could because we tailor our classes to meet your needs! They are updated monthly as the information for home buyers changes.  Did you know, for instance, that there are special grants through Minnesota Housing Finance Agency for first time home buyers in Minnesota?  You can receive up to $14,999 to help with your down payment and closing costs.  There are also federal plans such as the time-limited $8000 first time homebuyer credit. There are also city and county sponsored programs, and many important details that our experts here can tell you about!

We have special homebuyer advice and ideas that you can tap into immediately. We cover an array of topics, including credit scores, mortgages, finding the right home, and much more! We also follow up with our students, sending you ongoing information after the class so that you’re in the loop for current home buying news and events. Visit our Signup page and signup for your free class today!

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Many Home Buyers are surprised to learn that in addition to a down payment, they may need to pay other fees at closing, commonly referred to as “closing costs”. The amount of these fees will vary from mortgage company to mortgage company. A good estimate is about 3-3.5% of the purchase price of the home.

When you are buying your first home, it may be hard for you to come up with enough money for both a down payment and closing costs. Many first time Home Buyers ask for closing cost assistance from the Seller. Most mortgage programs will permit the Sellers to help the Buyer pay for their closing costs. All you need is the Seller’s consent. Your Realtor will ask the Seller for this assistance when they write up the contract on your new home. Asking the seller for closing cost help is very commonly done, especially when buying your first home.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs. “Simple answers to home ownership questions”.