Home-buying as a couple is likely to be more fun than home-buying on your own.  For one thing, you now have two incomes.  Mortgage consultants will look at your combined monthly gross income to find out “how much house” you can buy.

As a single person with an income of $40,000 a year and no debt, you could afford a home that costs about $120,000.  As an engaged or married couple with two incomes totaling $80,000 a year and no debt, you could now afford a home of about $250,000 a year.

Whether your goal is to live inexpensively the first several years together and save money, or spend more money to get a “dream home” for your first home together, the point is you have choices now that you didn’t have as a single person.

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”.

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”.

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”.

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”.

If you are actively shopping for your first home, it’s impossible to avoid looking at foreclosed homes.  They represent almost half of the homes on the market in Minnesota.  There are four things to remember when you consider purchasing a foreclosed home:

The owner of the home is a bank.  The bank representative has never lived in the home and will not tell you anything about it.  They don’t know how old the roof is, whether the furnace has had annual service, whether there has been a water leak in the home and if everything in the home works.  In other words, you will receive no information on the home except what you discover yourself.

The personal property remaining in the home is not owned by the bank and they cannot and will not sell it to you.  If there is still a refrigerator, a stove, a microwave, a washer and a dryer, technically they belong to the original home owner and not the bank.  If the home owner chooses, they can come and remove them before closing.  If they don’t come to remove them and they “abandon” them, then you can claim them at the time you move in.

The utilities in these homes may have been disconnected without properly preparing the home.  If the heat has been turned off in the wintertime and the plumbing in the home has not been winterized and treated with antifreeze, the pipes may freeze and burst.  When spring comes and the water melts, it may cause mold to grow in the home.  These homes can cost a lot of money to repair and restore. 

There are usually one or more problems with foreclosed homes that require remedy by the buyer.  These may be big problems (burst pipes, mold, ageing roof) or these may be small problems (missing appliances, doors, kitchen cabinets etc.).  Be prepared to spend some money after closing to restore the 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”.

Did you know that you can claim your $7500 Tax Credit THIS YEAR even if you didn’t buy your first home until 2009?  Yes, that’s right.  You can file a claim to get your $7500 Tax Credit back BEFORE you file your 2009 taxes.  So you don’t have to wait till next year to get the money.

Congress is considering some other important changes to the current program.  Two changes are being discussed.  One change would be that the tax credit would be a true credit, rather than an interest-free long term loan.  Right now, the tax credit must be repaid $500 per year for the 15 years after it is claimed.  Under discussion is a law which would make the tax credit a true gift, with no repayment necessary.

Another change is under discussion.  Right now, the tax credit applies to first time Home Buyers purchasing a home between April 9, 2008 and July 1, 2009.  Congress is considering whether to extend the time during which the program would be in effect.  The new deadline would be December 31, 2009.  However, this has NOT YET been enacted into law.   It’s just under discussion.  Read another one of our blogs for some of the rules governing the $7500 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”.

Congress passed a law last year that allows you, if you are buying your first home, to claim a special tax credit only for first time home buyers.  You qualify if you haven’t owned a home in the last past three years, if you earn under $75,000 a year for a single person and $150,000 a year for a married couple, and if you purchased the home between April 9, 2008 and July 1, 2009.  You must purchase the home for your own use (you cannot purchase the home to rent it out).

The tax credit actually will pay you the $7500 at the time you file your tax return.  If you buy this year, for example, you could claim the $7500 credit at the time you filed your tax return next year.  However, the credit is not a true “credit”.  It really is an interest free long term loan that must be paid back over the next 15 years.  You would pay $500 per year for 15 years.

You could use the tax credit to fix up the home or if you asked a relative to assist you with down payment money for the home, you could pay back your relative with the tax credit money.  Congress hopes that this tax credit will help more first time home buyers be able to buy their first homes.

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”.