**Update November 6, 2009: President Obama has just signed a new law extending this tax credit until April 2010. Under the new law, most of the requirements remain the same, but the income cap has been raised to $125,000 or $225,000 for couples and the home must be priced under $800,000 to qualify. An additional $6,500 tax credit was also added for existing home owners, providing they have owned the home for at least five years. **
Today, there are many incentives for new home buyers. It is possible to get some great deals on homes, as home values are at a historic low. There are many foreclosures as well, which can be a great way to save money, and mortgage interest rates are also the lowest they have been for many years. There is also an $8,000 first time home buyer tax credit available to Americans, which does not have to be repaid.
The First Time Home Buyers Tax Credit is part of Obama’s American Recovery and Reinvestment Act, which was passed in 2009. This tax incentive is designed to help jump start the economy and help make homes more affordable for first time home owners. This is not the first time a tax incentive has been offered to new home owners, however the Obama housing tax credit is different because it will not need to be repaid.
*Under the extension, as long as you have a binding sales contract in place before April 30, 2010, you have until June 30, 2010 to actually close on the home.
The Obama First Time Buyers Tax Incentive can be applied towards many types of homes, including mobile homes, manufactured homes, single family homes, condominiums, house boats, multi-family homes, and even new constructions.
The Federal housing tax credit for first time home buyers provides for 10% of the value of the home, up to $8,000.
The $8,000 stimulus check does not need to repaid, providing you live in the home for at least three years. If the home is sold or is no longer used as your primary residence in the first three years, the $8,000 will need to be repaid.
The 2009 First Time Home Buyers Tax Credit can be claimed on either your 2008 or 2009 tax return. It is necessary to complete an IRS Form 5405 and submit it with your regular tax return.
If you have already submitted your 2008 tax return to the IRS, it is possible to file an amended tax return, to receive your money early. An amended tax return usually takes between 6 to 8 weeks for the IRS to process and will mean you can receive your stimulus check early, without having to wait.
If you owe the IRS money, then the stimulus check will be used towards this balance, with the remaining funds returned to the first time home owner.
Those that do not owe the IRS any money will receive the full balance of the stimulus check. This is true even of those who do not pay any income tax.
You would not qualify for Obama’s First Time Home Buyers Tax Credit, but there is a different tax credit available.
For those who purchase a home between April 8, 2008, and Dec. 1, 2009, an $8,000 no interest loan is available. This loan is provided as part of the Housing and Economic Recovery Act of 2008 and will need to be repaid starting in 2010.
The First Time Homebuyers Credit has most of the same requirements as Obama’s Tax Incentive.
The 2009 Federal Housing Tax Credit for first time home owners is a new tax credit that can make buying a new home much more affordable. This tax credit is part of the American Recovery and Reinvestment Act of 2009 and is available for up to $8,000.
One of the things that sets this tax credit apart from other home buyers tax incentives is that it does not need to be repaid. As long as you keep the home as your primary residence for at least three years, the tax credit there is no obligation to repay this tax credit. Previously, the government has offered tax credits for new home buyers that were simply no-interest loans, but Obama’s First Time Home Buyers Tax Credit is offered as a one time payment.
There are several requirements that must be met to be eligible to receive Obama’s First Time Home Buyers Tax Credit. The main requirement is that neither you or your spouse has owned a primary residence in the last three years. The home must also have been purchased in 2009 between January 01 and December 01. Those who purchased a home in 2008 are also eligible to receive a tax credit, but this credit needs to be repaid.
The first time home buyers tax credit is based upon 10% of the homes selling price, up to $8,000. Even people who do not owe anything in income tax can receive this tax credit, providing they meet the other requirements.
There is an annual income level set at $75,000 for single home buyers and $150,000 for married couples. However, those who have an income higher than this may still be able to receive a partial tax credit.
In addition to traditional single family homes, Obama’s 2009 Tax Credit for first time home buyers can be used on mobile homes, condominiums, new construction, manufactured homes, and even house boats. However, the home can not be a gift from a family member.
Claiming the first time home buyers tax credit is very easy and can be done on either your 2008 or 2009 tax return. There is only one extra form that must be completed and even if you have already filed your 2008 tax return, it is possible to file an amended tax return and receive your tax credit check within 8 weeks of submitting your amended tax return.
This Federal Housing Tax Credit is mainly available to those who are American Citizens, although exceptions may be made for non-residents with valid visas.
Obama’s tax credit is designed to help stimulate the housing market and offer an incentive for first time home owners. This tax credit can be a great way for those applying for their first mortgage to help offset the cost of the down payment or to greatly increase the equity in their home. It is, however, important to note that if you currently owe the IRS money on your taxes, they will use the tax credit to pay this balance and refund you the difference.
Over the past few months, it seems that congress and President Obama have passed a great number bills to help stimulate the economy. While many of these bills are viewed mainly as a bailout to some of the very people who got us into this mess in the first place, the First Time Home Buyers Tax Credit can actually help the people who need it the most.
The First Time Home Buyers Tax Credit is part of the American Recovery and Reinvestment Act of 2009, which is an economic stimulus packaged passed signed into law by President Obama on February 17, 2009.
The American Recovery and Reinvestment Act is intended to help jump start the economy and contains a number of provisions, including expanded unemployment benefits, tax relief, as well as the first time home buyers tax credit. Of the $787 Billion Dollars allotted for the American Recovery and Reinvestment Act $237 Billion is slated for individual tax relief, $51 Billion for Corporate Tax Relief, and almost $148 Billion has been set aside for healthcare. Other funds will goto housing, HUD, scientific research, Energy, and Infrastructure.
$6.6 Billion dollars has been allotted for the first time home buyers tax credit, which provides up to $8,000 towards the purchase of a home for qualified citizens. In order to be eligible to receive the tax credit, the buyer, and their spouse, muse not have owned a primary residence in the last 3 years and must make less than $75,000 a year, or $150,000 for couples. The tax credit is figured off of 10% of the value of the home up to $8,000.
The first time home owners tax credit can be used on almost any type of home, including houseboats, mobile homes, new construction, single family homes, manufactured homes, and condominiums. In order to qualify, the home must be purchased between January 1, 2009 and December 1, 2009.
This is not the first time that the Federal Government has offered an incentive to new home buyers. In fact last year, with the passage of the Housing and Economic Recovery Act of 2008, an $8,000 no interest loan was made available for those who purchased a home between April 8, 2008 and December 1, 2009. However, this loan had to be paid back by the homeowner.
The First Time Home Buyers Tax Credit of 2009, on the other hand, does not need to be paid back. However, it is necessary to live in the home for at least 3 years. Those that sell the home before then will have to return the money, although some exceptions may be made, such as in the case of divorce.
The 2009 Home Buyers Tax Credit can be claimed on either 2008 or 2009 tax returns. People who have already filed their 2008 taxes can file an amended tax return, which is usually processed within 8 weeks, allowing them to receive their tax credit early. While the full amount of the tax credit will be sent to those who owe nothing in taxes, including those with no income, if you have an outstanding debt with the IRS, the money will be used to pay this debt first.
When you look at the big picture, the First Time Home Buyers Tax Credit of 2009 makes up less than 1% of the $787 Billion American Recovery and Reinvestment Act Stimulus Package. However, this tax credit can be a big help to those who are buying a home for the first time.
The process of applying for a mortgage, finding a home, and closing the deal can be a very stressful time, which is filled with a great deal of paperwork. Often, the process begins with you providing the lender an outline of your available funds and your salary. They will initially use these numbers to get an idea of how much of mortgage to offer you and the value of this mortgage. While initially they may only require your word, the mortgage lender will ultimately require proof of your employment and a number of other financial details, so it is a good idea to prepare as much of this information ahead of time as possible.
One of the most tedious parts of purchasing a new home is doing all the paperwork, but by spending some time getting your financial records in order before visiting a mortgage lender, you can greatly simplify the process of getting a mortgage and greatly reduce your stress.
Below, you will find some of the information that is usually required by a bank or other mortgage lender in order to approve your loan.
By having the above information ready before begin visiting lenders, you can make the entire mortgage approval process much simpler and quicker.
Owning your own home can have a number of benefits, both financially in the way of tax credits, but also psychologically. While there are many benefits of home ownership, however, many times the advantages of homeownership far outweigh those of renting.
One of the biggest advantages of homeownership is that there are a number of tax benefits. It is possible to deduct interest payments, which for the first few years are pretty high, directly from your taxes, as well as money that is spent fixing and repairing the home. The tax benefits alone often make owning a home considerably less expensive than renting and currently new homeowners can also receive up to $8,000 or 10% of the homes cost, whichever is greater, as a tax credit.
Another big advantage of homeownership is that you are building equity as you pay off your loan. Assuming the home increases in value over the time you own it, you not only build up direct equity by paying off the loan, but also indirect equity. This equity can turn into a rather substantial profit when the home is sold. This is opposed to renting, where you get nothing from making your monthly payments.
Since you own the home, this also means you are free to do with it what you want. For example, you might decide to completely re-landscape the front lawn, tear down a wall, or repaint your home. These improvements often in turn increase the value of the home, which means you get a real return for investing time and money in your property. Of course the flip side to this is that if something breaks, you will have to take care of it yourself.
Many homeowners will buy a home that is in need of repair and live in it as they fix it up, this can result in a great increase in the value of the home and increase the equity the homeowner has in the home. This type of equity is often called sweat equity.
Owning your own home also gives you a lot more control in where you live. When renting, it is not uncommon for the landlord to sell the property, this might mean you can no longer live their. It is also possible that the landlord could overextend themselves, resulting in the foreclosure of their rental properties and meaning that you must move.
There are many advantages to owning your own home, but for some renting is the best choice. For example, if you do not have a steady income, do not plan on living their for more than two years, don’t have money for a down payment, or simply don’t feel like taking on the responsibility of fixing, repairing, and maintaining the property, renting might be a better option.
Before you settle on a new lender, you may want to check the Mortgage Lender Implode-O-Meter at ml-implode.com. The site proclaims a mission of transparency, education, and accountability for the mortgage industry. The site was started in January 2007 by blogger Aaron Krowne who realized that the housing market was critical to the success of the US economy and grew frustrated by the lack of coverage of the sub prime housing crisis by the mainstream media. Starting with a single page with only 6 lenders listed, ml-implode.com soon had dozens of lenders listed and began picking up national media coverage from Bloomberg and CNN. It is now consdered and authority on the current state of the mortgage crisis in the US and received over 100,000 visitors a day.
The site breaks down the large mortgage companies into 3 categories.
Although it is a community centric forum, the editorial staff requires that 2 out of 3 of the following criteria be met before a company makes it to the “implosion” or “ailing” list:
Over all the site has some great information and is organized in a consistent manner. I highly reccomend giving it a look or even subscribing to the feed if you want to stay up to speed on the latest mortgage implosions.