first time home buyer – owner loan

Roby Pagong asked:


First time home buyers can now enjoy tax credit. The government is currently offering this. The home buyer can enjoy as much as $8,000 tax credit. However, not everyone is qualified. If you have purchased a property this year, verify if you qualify for the said program. If you want to find out if you qualify, keep on reading.

The initial thing you have to keep in mind about this stimulus is that it is established for the first time home buyers. This is for those who have purchased their principal residence from January 1, 2009 up to December 1, 2009.

As stated earlier, this are for the first time home buyers who have purchased a principal residence during the period indicated. This means that home purchases made in 2008 is not covered by the program. The date of the purchase is the date of the date of the closing, which is the actual transfer of the property ownership. If you acquired the property in a different manner, consult a financial adviser to verify on how you can benefit from this arrangement.

You also have to be a first time home buyer in order to qualify. However, who is the first time home buyer? You are considered as one if you have not purchased a principal property in the last three years. You cannot be qualified as one if you have just purchased a principal property a year or two ago. You can still qualify though if the purchase you made concerns a vacation home or an investment property.

You should also take note of the income limit. The program has set limits as to who can qualify for the said program. For singles, the adjusted gross income should not be more than $75,000. Couples on the other hand, who are joint filers, should not exceed $150,000 on their adjusted gross income.

The tax credit is usually 10% of the value of the purchased property or the $8,000, whichever value is lower. Bear in mind that the tax credit is refundable. This means that you can claim it even if your tax liability is not that much. You should also remember that the said credit can be collected by the government back. This happens if you lose ownership of the property before reaching the third year mark. This means that you should have ownership of the property for at least three years. There are exempted cases though, such as health concerns and divorce.

Do not worry if you have filed your tax return early this year because you can amend it by filling up the 1040x form. It is best to talk to a tax adviser to ensure that all necessary steps are taken to amend your tax return.

As an added bonus, the HUD has authorized buyers with a mortgage insured by the FHA to avail of a short term loan amounting to as much as $8,000. This way, they can make use of the tax credit even if they have not filed their tax return yet.

Now is the best time to purchase a home. The price of the properties and the interest rates are low. Additionally, there are programs like the tax credit offered by the government.



Robin