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  1. WHAT YOU SHOULD KNOW ABOUT THE $8000 TAX CREDIT FOR FIRST TIME HOME BUYERS

    Jun08

    Comments (537) June 08, 2009 | posted by: CWPStaff

    Are you a first time home buyer or some one who hasn’t owned a home for the past three years?  If you are there is good news for you.  The government is willing to give you a gift of $8000 just for purchasing a home.  “What’s the catch,” you may ask?  This time there really isn’t one.  There are only a couple of simple criteria to meet and you are on your way.  The first thing that I already mentioned is that you must be buying your first home or you must have not owned a home in the past three years.  That’s pretty straight forward and simple.  Beside that you must remain in you home for 3 years before moving or selling that home.  If you move to a different primary residence before that time the government is going to want that money returned.  There are no other restrictions on the money.

     

    “Do I have to use the money for the home purchase,” you may ask?  The answer to that is simple and straight forward as well.  You can use the money for anything you want.  You may choose to use the money for the down payment and closing costs.  That can be arranged through either Idaho Housing loans or FHA loans.  Maybe you want to use the money to purchase furniture for you new home.  That is just fine as well.  Perhaps you have other financial needs or wants.  You can use the money any way you’d like.  Not bad for a government program that usually has all kinds of strings attached.

     

    “How do I go about getting the money,” you may ask?  That is relatively easy to do as well.  As soon as you put a property under contract you can file an amended tax return for 2008 with a simple one page form and submit it to the IRS.  Within a few weeks you will have your cash in hand.  You can also weight until you file you 2009 taxes and make the application then.  If you owe taxes for 2009 you will receive a check for the difference of what you owe and the $8000.  If you are getting a refund the $8000 will be added to the refund amount.  A third way to get the money, which requires using either of the afore mentioned details, is to use FHA or IHA loans to finance your purchase.  These loan guarantee companies will lend you $7000 up front to be used as part of your down payment and closing costs at a very low interest rate.  Then when you get your refund you will have the means to pay back the $7000 plus the interest charge.  This is probably the best option if you need the money for closing.  You could take a chance on getting the money back by filling the 2008 amended tax return but if the money did not get back in time for closing you could be in trouble.  I personally would not recommend that option.

     

    The other thing you need to know is that this offer only lasts until the end of November of this year.  That may seem like quite a long way out but the deal needs to be closed by that date in order to get the money back.  In our currant housing/financial market closing times are being extended beyond the usual 30 days form the time of applying for the loan and actually closing the deal and taking possession of the home.  In some cases it may be 60 or even 90days to close.  You won’t want to push that deadline too close and miss out on the refund.  There are a couple of things that are happening that are making the closings take more time.  Lenders are inundated right now with home refinancing because interest rates have fallen to record lows as of late.  They have also cut back on personal just like most other companies in these tough economic times.  That means that your application may set at the bottom of a pile of applications for several days or weeks before it even gets looked at.  Then if there happens to be a problem the whole process could start all over again.  The other thing you need to be aware of is that there are tighter rules as to who can qualify for a loan.

     

    My suggestion is this.  If you have any intention of purchasing a home this year then now is the time to act.  Start with one of the local realtors® who can and will be happy to help you get through the process as quickly and smoothly as possible.  He or she can help you find a lender that will pre-approve you for a loan ahead of time.  That way you will be in a position to act as soon as you find the home you want.  There are no delays and you can make an offer on the spot.

     

    There has not been a better time to purchase a home and get out of your rental than right now.  Interest rates are at all time lows and the $8000 tax credit is a bonus that won’t last for ever.  Talk with a Realtor® today.  Happy home hunting!

      

    Paul Bowen

    President:  Upper Valley Realtors Association
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