Dec 15, 2009

Planning to Purchase in 2010? Try to Act before April 30th - TAX Credits !!

Hello Neighbors,

If you are planning to buy a home (your first, or a "trade up"), you may want to start the process before April of 2010.

Tax Credit for First-Time Homebuyers

FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Tax Credit for Current Homeowners

The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the timelines available.

What's So Important About a "Tax Credit"?

The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Home financing is never an easy thing to wrap your head around. It seems like there is an ocean of financing options available for buyers these days, and it's incredibly hard to figure out which option is right for you. Not every financing option works for all people, it's important to have a trusted and experienced real estate team leading you through the home buying process. There is no doubt in our mind we can guide you through your home financing and provide you with the best options.

We would love the chance to talk about what it takes to buy a home in today's marketplace and what sort of financial options are available to you. Neighborly Realty's partner "Neighborly Financial" has access to loan products from dozens of lenders. When the two companies are able to combine services for the same client, the savings to that client are in the THOUSANDS of dollars.

Please call or email with any questions or concerns or just to talk about your real estate options. We look forward to hearing from you.

Happy Holidays,


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