Remember Me
forgot your password?

First Time Homebuyer? Give Me a Break! (a Tax Break Please)

If you are (or will be) a first time homebuyer purchasing a home between April 9, 2008 and June 30, 2009, you may be eligible to receive a tax credit.  Good news, right?  This tax credit is kind of like a fifteen year, zero interest loan.  Not a bad deal, huh?

 

The tax credit you can claim is equal to the lesser of $7,500 or 10% of the price of the home.  So if you buy a $65,000 home, you can claim $6500.  But, if you buy a $85,000 home, you can only claim $7,500. The main catch is you have to pay the credit back to Uncle Sam over the next 15 years. However, it’s interest free. You start doing so the second tax year following your home purchase, so you have a little breather before you start.  If you sell your home before you’ve settled your debt, you have to pay it back upon sale.  But you won’t owe the full amount of the outstanding credit due if your gain from the sale of your house is less than what you owe.

 

You have to qualify for the benefit, naturally.  And the amount for which you can qualify varies.  You have to be a first time homebuyer, as mentioned above (and that includes your spouse if you’re both on the loan) who has had no ownership interest in a principal residence for the past three years (date of your home purchase).   You see, in the mortgage world, if you haven’t had a mortgage within this time frame, the fact that you owned and sold a home five years ago doesn’t count.  Mortgage Lenders and underwriters want more recent history.

 

The tax break will not apply to you if you obtained a THDA (Tennessee Housing Development Agency) loan because the thought process is you’re already ahead from receiving benefit of use of proceeds from a tax-exempt revenue bond.  In other words, the government’s already given you a deal.  No double dipping allowed.  You also can’t be a non-resident alien, and you have to keep your home for at least a year to claim this particular tax benefit.  So, if you’re transferred and have to sell your home in six months, you’re out of luck.

 

There is an income cap that must be met for qualifiers.  If you’re single, the benefits available start to dwindle if you earn more than $75,000 per year, or $150,000 for joint filers.  It’s unavailable completely if you earn $95,000 individually or $170,000 jointly. 

 

So is this deal a good one for you?  How could you take advantage of it?  Well, again, look at it as an interest free loan.  You can put some nice appliances in a kitchen, finish out a basement or do some landscaping for this type of money.  So, it can work to your advantage.  But make sure you qualify before attempting to take this credit.  It’s not the type of thing you want to make a mistake about because filing your taxes is serious business.  And if you do qualify and it makes sense for you, spend your money wisely.  The ultimate goal is to get this economy moving, so if enough people can take advantage of it, it just may work.  It’s worth a try, right?

Kristin Abouelata - Home Loans

Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.

Rate this Article: 4 / 5 stars - 1 vote(s)
Print Email Re-Publish

Add new Comment



Captcha
+1
1. Bob (20:41, 21.01.2009)
If I bought my house in 2007 with an adjustable mortgage & refinanced in April 08 with a 30 yr fixed, do I still qualify for the FTHB Tax Credit?

  • Latest Mortgage Articles
  • More from Kristin Abouelata - Home Loans

Tips for Tracking Mortgage Rates

By: allyoun11 | 11/11/2009
If the recession has taught homeowners and those looking to buy a home anything, it is that tracking mortgage rates is an important part of home ownership. Most have learned that mortgage rates do not stat the same over a span of months. Mortgage rates for 30 year fixed rates will differ from those of 20 or 10 year rates.

Tips for Finding Affordable Reverse Mortgages Rates

By: allyoun11 | 11/11/2009
Due to the qualification standards, reverse mortgages are usually available exclusively to seniors. In order to obtain a reverse mortgage you must be over 62 years of age and have equity or full ownership in your home. Finding an affordable reverse mortgage rate is in many ways more daunting the obtaining a mortgage for a more traditional loan.

President Obamas Mortgage Refinance or Modification Stimulus Plan

By: MPetrone | 11/11/2009
President Obama knows that right now there are millions of homeowners struggling to make their mortgage payments and are trying to save their home from being lost. That is why the “Making Home Affordable” plan has been enacted. This plan will allow homeowners the chance to easily modify or refinance their mortgage into a new, better, more affordable monthly home loan payment.

Mortgages: Don't Just Go With Any Home Loan

By: Ray Heinson | 11/11/2009
Your payment will be fixed for 15, 20 or 30 years. On the opposite end of the spectrum are adjustable rate mortgages. These feature a interest rate that can change with market conditions every month, 3 months, 6 months, annually, every 3 years

Fixed Rate Mortgages During Economic Downturn

By: Joel Desvignes | 10/11/2009
With the housing market picking itself up follow a period of economic downturn, banks and building societies are increasingly willing to lend money. Fixed rate mortgages are amongst the most popular types of mortgages.

Fight Home Foreclosure- Use ‘the man’ against ‘the man’!

By: Marcel A Johnson | 10/11/2009
If you ever find your home up for foreclosure is one important thing to bear in mind: this is a fully legal proceeding and is something that can be resolved and countered in court! What does this mean for you? You can fight it!

Fighting home foreclosure online- Getting in touch with your entitlements

By: Marcel A Johnson | 10/11/2009
If you're seeking to find a viable option for you in order to refinance your home and prevent a foreclosure from occurring. You may be a top candidate for Obama's home refinancing program. While his program is designed to help families retain their homes throughout this challenging economic time isn't fortunate. Most families who would benefit from a most do not even know about the program or how to apply...

Affordable Home Refinancing- Mortgage Modification Management

By: Marcel A Johnson | 10/11/2009
Many people who are facing financial difficulties due to high mortgage payments made have been asking themselves if they can qualify for the affordable home refinancing program as proposed by President Obama. If you think you might qualify or want to know if you can qualify; first ask yourself these few questions....

Getting a Mortgage? on What Term?

By: Kristin Abouelata - Home Loans | 01/12/2008 | Mortgage
When exploring your options regarding a mortgage, people often overlook the most basic consideration. How long do you want to make payments?

What’s the Low Down on Loan to Value?

By: Kristin Abouelata - Home Loans | 01/12/2008 | Mortgage
When buying a home, most people only concern themselves with the interest rate and the type of loan they are getting. However, the loan to value may be another aspect to take into consideration.

Mortgage Lending and Identity Theft: What You Should Know

By: Kristin Abouelata - Home Loans | 22/10/2008 | Mortgage
When you apply for a mortgage these days, lending institutions gather enough information on you to form an independent DNA sample (not really, but you get the picture). What steps should these organizations take to protect you from identity theft?

Mortgage Lending: It’s a History Lesson

By: Kristin Abouelata - Home Loans | 08/10/2008 | Mortgage
When applying for a loan, a mortgage lender cares more about your past than your future. And sometimes, a lender cares more about your past than the present……

Interest Rates: One Man’s Gain is Another’s Loss

By: Kristin Abouelata - Home Loans | 01/09/2008 | Mortgage
How can two borrowers can buy the same house, and get completely different interest rates? There are multiple considerations to take into account when a lender is pricing an interest rate for a customer……

First Time Homebuyer? Give Me a Break! (a Tax Break Please)

By: Kristin Abouelata - Home Loans | 01/09/2008 | Mortgage
The Housing Assistance Tax Act, which is a section of the recently passed Housing and Economic Recovery Act, provides some incentives to put the residential housing market back on it’s feet. Are you in a position to take advantage of them?

Jumbo Loans and White Elephants: Will the Pace Pick Up?

By: Kristin Abouelata - Home Loans | 04/08/2008 | Mortgage
The rates for jumbo loans (loans above $417,000) have caused somewhat of a glut in the real estate market of higher end homes. What’s caused these rates to stay steadily higher while rates for traditional loan sizes have seen record lows in the past months?

Submit Your Articles Free: Signup
Article Categories




Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (0.19, 1, w1)