first time home buyer – owner loan

February 25, 2010

First Time Home Buyer Stimulus – Tax Credit Deadline Extended

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 3:32 am
Safiur Rahman asked:


Owning one’s own home is a dream of every individual. But as fate would have it, the current economic crisis with rampant job cuts in the US have made this dream a distant reality for many. The introduction of President Obama’s home stimulus package has, however, made this goal significantly more achievable for first time home buyers.

The first time home buyer stimulus package offers individuals a tax credit of 10% on the purchase price of a home (with a maximum amount of $8000) for homes purchased between January 1st, 2009 and April 30th, 2010. For those of you already familiar with this program, recent legislative changes have extended the previous purchase deadline of December 1st, 2009. Sales occurring by June 30, 2010 are also covered provided a binding contract is entered into by April 10, 2010.

A key point to mention here is that this credit is a grant which does not need to be paid back (unless the home is sold within the first three years). The entire credit amount is deducted from the total taxes owed to the government. Therefore, an individual qualifying for this credit who owes the government $8,000 in taxes would then owe nothing.

There are certain criteria that have to be met to qualify for this tax credit. First and foremost, you must meet the definition of a first time home buyer. For the purposes of the stimulus package, you are a first home buyer if you have not bought a home as a primary residence in the three years prior to your purchase. This applies to both you and your spouse if you are married. Therefore, if you have not purchased a home as a primary residence in the last three years but your spouse has, then you do not qualify. A primary residence does not include vacation homes; therefore if you own such a property you may still qualify for the credit. There are also no restrictions on the specific type of home (e.g. townhouses, condominiums, mobile homes, houseboats, etc) that can qualify as long as it is your primary residence.

You must also be within certain income limits (i.e. not earn above a certain amount) to qualify for this tax credit. For home purchases after November 6th, 2009, the income limit is $125,000 per year for single tax payers and $225,000 for couples filing jointly. These limits have also been amended recently from the previous limits of $75,000 for single tax payers and $150,000 for couples filing jointly.

I hope you found this overview of the first time home buyer stimulus package to be useful. There are many nuances surrounding the home stimulus legislation and it is always challenging to keep up with all the changes going on.   Just make sure you do all the necessary research, stay up to date on the latest developments, claim your credit on your next tax return, and enjoy your new home!



Suzanne

February 23, 2010

First Time Home Buyer Stimulus: Are You Ready to Claim Your Tax Credit of Up to $8,000?

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 11:41 pm
Safiur Rahman asked:


Buying your first home is a big, life changing decision regardless of the economic climate. The decision becomes even more bold in an a recession where job cuts are rampant and the housing market has been in a slump for over a year. Nevertheless, if you are confident in your financial future, this is actually the best time to buy a house thanks to the federal government’s first time home buyer stimulus package. The stimulus package awards first time home buyers with a tax credit of up to 10% of the purchase price of their home with a ceiling of $8,000. In layman’s terms, this is a grant which does not need to be repaid unless you sell the home within the first three years. More specifically, this is a dollar by dollar reduction in taxes owed or an increase in your tax refund. It is also referred to as “refundable” tax credit because you can claim it regardless of your federal income tax liability.

For those who are unfamiliar with this program, here is a quick summary of the key requirements. Firstly, you must be a first time home buyer as required by the current legislation. You meet this definition if you have not purchased a home as your principal residence in the three prior to your current purchase. If you are married, this applies to both you and your spouse. In other words, If either of you do not meet the definition of a first time home buyer, neither of you qualify for the tax credit. A primary residence does not include vacation homes and the specific type of home (e.g. townhouse, condominium, mobile home, etc) does not matter. Secondly, the purchase must take place between January 1st, 2009 and April 30th, 2010. The deadline was extended recently which gives you a few more months to close on your purchase. (The previous deadline was December 1st, 2009). Technically, you have until June 30th, 2010 to complete the sale but a binding agreement must be entered into by April 30th, 2010. Thirdly, you must fall within certain income limits. Single tax payers must not make more than $125,000 annually if the sale occurs after November 6th, 2009 and not more than $75,000 if the sale occurred between January 1st, 2009 and November 6th, 2009. Married couples filing jointly must not make more than $225,000 annually if the sale occurs after November 6th, 2009 and not more than $150,000 if the sale occurred between January 1st, 2009 and November 6th, 2009. The income limits were also raised as part of recent changes. There are other caveats in the legislation but these are the main requirements.

If you feel that you qualify for this tax credit, you are likely wondering how you will claim it. You do so on your federal income tax return. You must first complete IRS Form 5405 to determine the amount of your tax credit. You then enter that amount on line 67 of the 1040 form on your 2009 tax return or line 69 on your 2008 tax return. No other applications or special forms are required. It is as simple as that.

If you are serious about buying your first home by April 30, 2010, the best advice anyone can give you is to plan ahead and plan accordingly, get in touch with mortgage brokers, file your taxes on time, and make the provisions of the first time home buyer stimulus package work for you. Most importantly, do all your due diligence and do not procrastinate! The law may change from time to time so make sure you stay current on all the latest developments. If you do all that, you’ll be well on your way to owning the home of your dreams.



Tamara

February 14, 2010

First Time Home Buyers – Home Buying Process

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 6:51 am
Jeff Ragan asked:


Are you ready to buy that first home? Are you sure you’re ready to begin? Some would say you need to begin with finding the house you want to buy. But really there are steps you need to take as first time home buyers before you begin. Let’s say you’re planning a wedding, you don’t begin the process by picking a reception hall when you haven’t even popped the question! The same with buying a house. There are some steps you need to take before you pick the location.

Beginning Steps for First Time Home Buyers:

You need to find out how much you can afford. Can I qualify for a loan? Do I have enough money saved for a down payment? What type of loan programs are out there? Which one is best for me? Do I need a bank or a broker?





Step One:

In order to figure how much you can afford you need to take a look at your income and expenses. Do you have enough left over at the end of the month to make a mortgage payment? If you’re renting you probably already have a certain amount of money budgeted. Will that amount buy you the size home you want? There are mortgage calculators out there that will help you estimate how much you can spend.

Step Two:

The first thing in qualifying for a loan is your credit rating. You may need to get a credit report pulled. Most lenders use the middle score to figure your credit rating. They get this figure by taking the credit score from all three credit reporting agencies and picking the middle one. If your credit score is too low, then you have some work to do before you go looking for that new home.

The second thing in qualifying for a loan is the ability to pay it back. So your debt-to-income (DTI) reflects whether you are a good risk or not. If you’re expenses are higher than your income, you need to lower those first.

Step Three:

Now you need to look at your savings account. Do you have enough money saved for the down payment? If not, then you may need to consider down payment assistance or grants to help you. Or perhaps you may need to set up a savings plan to help you save for that down payment.

Step Four:

It’s a good idea for first time home buyers to be educated on the different types of loan programs out there to see which one is a good fit for you. There are programs that have low down payments, ones that are best for buying in suburban areas, ones that have low interest, and many more. It never hurts to be educated.

Step Five:

You will have to make a decision on who you’re going to use to process the loan. You may wish to go to your bank and have them start the application process. Or you may wish to pick a broker. There are pros and cons to both, so spend some time learning the pros and cons so you can make your decision.

Now you’re ready to propose marriage!!! But before you buy that ring, know your rights. First time home buyers should understand things like Fair Housing, Real Estate Settlement Procedures Act (RESPA), Predatory lending and what the borrower’s rights are before they initiate their search.

Once you’re really engaged, I mean have all these steps in place, then you can begin looking for that first home. You’ll be happy you did all this planning ahead of time.

Jeffrey Ragan wants to help you get into your first home by offering a free buyers guide and other helpful informatin on their website, First-Time-Home-Buyer-Solutions.com.



Kathleen

January 18, 2010

Obama’s First Time Home Buyer Stimulus

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 12:13 am
Suzan Smith asked:


Obama’s first time home buyer stimulus is for those people who had postponed buying a house due to the sudden outbreak of recession in late months of 2008. The US President Barack Obama and his team of administrators have planned and signed 2009 economic stimulus package and there are many sections and programs under this mega stimulus package. The first time homeowners are in fact the tenderest section of borrowers and they have lot of fear in their mind before and after possessing the loan.

However first time homeowners need to be very careful while seeking loan and believe the reliable sources only. The financial crisis has left everyone with postponed dreams, shopping and spending even on useful accessories. There are people who have postponed the renovation or modification in their house, or if they had previously planned to buy a house, they have postponed that too. But the government wants to help the first time homebuyers to come forward and buy their dream house. And for this they are offered very fewer rates of interest and the tenure for repayment is also increased.

Obama’s first time home buyer stimulus has much more to offer than just lower rate of interest to the first time homebuyers. This policy aims to give tax credits to the first time homebuyers who purchased their house between January 1, 2009 and December 31, 2009. The tax credit has $8,000 at its upper limit and is 10% of the present value of your house. This will help the homeowner save a lot as tax benefits and they will have considerable amount of money left to spend on other liabilities, responsibilities or mere luxuries.

The people when relieved of the financial tension and with some money left in their pocket every month, will go out and spend them in the sectors of their needs and interests, boosting up the country’s economy in return. So the main intension of the Obama government was to allow people have surplus money in their hands, which will directly affect the customer-spending percentage. This will help money stimulate in different areas of the market and society, which ultimately will increase employment opportunities in various sections and departments too.

The first time home buyers stimulus has fixed the income limitations of the buyer which is a very good sign so the less privileged class will get the benefit of the stimulus plan.



Colleen

January 13, 2010

Obama’s First Time Home Buyer Stimulus – Lucky Break For First Time Buyers

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 2:08 am
Suzan Smith asked:


The economy is terrible; the housing market as well. Foreclosures are at an all-time high and the market value of most homes has dropped to the point many homeowners do not even have equity any more. It is a very difficult time to sell a house.

But, it is a GREAT time to buy a house, and if you qualify, Obama’s First time Home Buyer Stimulus may help put you in that position! You may be able to take advantage of this stimulus program to purchase your first home and get a great deal of home for your money.

This program provides a 10% tax break for buyers who have never owned a home before or who have not owned a home for three years. The maximum amount is $8000. This stimulus money is in the form of a tax break, but you don’t have to owe that much in taxes to take advantage of it. It is a refundable tax break.

This money is not a loan; you do not have to pay it back if you stay in the house for at least three years. That is called recapture.

The income requirements for this assistance is in the form of a cap; a single purchaser cannot make more than $75,000. A couple who are purchasing together cannot have an income that exceeds $150,000. This home has to be your primary home.

To receive assistance from Obama’s First Time Home Buyer Stimulus, the home has to be purchased between January 1, 2009 and December 1, 2009. You should find out if you are able to take advantage of this great opportunity to not only get a sizeable chunk of financial assistance, but to be able to buy a home at a time when home prices are at their lowest in many,many years.



Gladys

January 2, 2010

First Time Home Buyer Credit Extended Until April 30th, 2010

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 10:14 pm
Safiur Rahman asked:


If you are looking to buy your first home, this could very well be the best time to do it.  If you’ve been keeping up with the news, it is likely that you are familiar with President Obama’s economic stimulus package aimed at boosting ailing housing market.  The first time home buyer stimulus is an important part of this stimulus package as it awards home buyers a tax credit of 10% of the purchase price of their home (with a maximum of $8000).  This is essentially money in your pocket because you do not have to pay this back unless you sell your home within the first three years.  The great news is that the deadline has been extended until April 30th, 2010 from the previous deadline of December 1st, 2009.  You actually have until June 30th, 2010 to close but must be in a binding agreement by April 30th, 2010.  This gives you a few more months to shop around, get in touch with mortgage brokers, and apply for a loan with terms that work for you.

There are two key requirements that you must meet in order to qualify for the tax credit.  The first requirement is that both you and your spouse (if applicable) must meet the definition of a first time home buyer as per the current legislation.  You are considered a first time home buyer if you have not purchased a home as your primary residence in the three years prior to your current purchase.  Vacation homes and rental properties do not count as primary residences; therefore, if you purchased one of those, you may still qualify for the credit.  The specific type of home (e.g. townhouse, condominium, mobile home, houseboat, etc) also does not matter as long as it is your primary residence.  Secondly, you must fall within certain income limits.  For homes purchased after November 6th, 2009 single tax payers must not earn more than $125,000 per annum and couples filing jointly must not earn more than $225,000.  Until recently, these income limits were significantly lower and unfortunately the changes are not retroactive.  If you purchased a home between January 1st, 2009 and November 6th 2009, then you must not have made more than $75,000 per annum if filing as a single tax payer and not more than $150,000 if filing jointly with your spouse in order to claim the credit.

Having discussed the two key requirements above, I must also mention that there are other factors that may preclude you from qualifying for the tax credit or require you to repay it.  For example, if you buy new home from a close family member such as a parent, grandparent, child, or spouse then you do not qualify.  Similarly, an RV or recreational vehicle does not qualify for the tax credit because it is considered “personal property” that is not affixed to a piece of land.  The law may also change from time to time so you really have to stay on top of the latest developments.  The best advice I can give you is to plan ahead, do all your research and due diligence, and familiarize yourself with the legal caveats in a way that will make this program work for you.



Crystal
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