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”.

First time home buyers, you are living in an unprecedented time.  The market is flooded with low cost housing, Congress is trying to think up incentives to lure you into buying these houses and tax breaks and incentives for home buyers abound.  Lucky you!!

However, on a less positive note, most of the zero down mortgages have disappeared from the landscape and they won’t be back for a long time.  You can probably purchase a home today with the equivalent of zero down but note that word “equivalent”.  If you qualify for some of the city, state or federally sponsored first time home buyers programs, you will collect cash either before or after closing on your new home.  In the case of the federal tax credit, you still need the cash to close to collect the credit.

If you have family or friends who are willing to help you out by gifting you money for your down payment, that could help you through the rough patch.  You could accept the “gift” and then make a promise to repay when your tax credit refund arrived.  Be sure to work with a talented and ethical mortgage consultant when purchasing a home.  These folks can track down every dollar to which you are entitled and make creative suggestions for how to bridge gaps that may arise.

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”.