Homebuyers

New Homebuyer Tax Credit

Back in 2008, there was a $7500 tax credit that was enacted by Congress and it was to be a great incentive for those buying homes for the very first time. It was to help out the over supply of homes out there that are for sale. For the year of 2009, there have been some changes made to this tax credit. Wondering how the new Homebuyer Tax Credit actually works? Here’s a look at the changes that have been made, who will be eligible, and a lot more important information that you need.

How this Has Changed for 2009

Wondering how everything has changed for the year of 2009 when it comes to the Homebuyer Tax Credit? Well, while the credit used to be $7500, it has now been increased by Congress to $8000. For those that purchase in 2009, there is no repayment feature on this credit, like there was back in 2008. Homes that are purchased for more than $80,000 will get then entire $8000 tax credit. Those that are lower than that will get 10% of the cost of the home. So, someone purchasing a home for $70,000 would get a tax credit of $7000. The purchase must be between January 1, 2009 and must occur before December 1st of 2009.

The People Eligible for the Credit

Many people are wondering who is going to be eligible for this new Homebuyer Tax Credit. Well, only people who are purchasing a home for the very first time are going to be eligible. People qualify as a first time home buyer if they have not owned a home for the past three years. Of course the purchase of the home has to fall in the time frame as well, in order to get this credit.

How it All Works

So, how does this tax credit work? Well, the tax credit reduces the amount of income taxes that are paid. When you fill out your income tax return, you claim these credits on there. You figure out your income items, and then your exemptions, then you figure out the amount of your total tax. Once you figure this out, then the tax credits are going to be applied to what you owe. If you owe $10,000 to the government in taxes and you have the tax credit of $8000, then you’ll only end up owing the government $2000.

A Refundable Credit

There are times when you can get a refundable credit as well. This occurs if you are able to get this tax credit for your home, but you owe less than the $8000 on your taxes. In this case you can actually get money back in a refund from the government. If you only owe $3000 to the government and you have the tax credit of $8000, then you’ll end up getting a refund check from the government for $5000.

Income Restrictions

You will find that the new Homebuyer Tax Credit does come with some income restrictions that you need to know about. The restrictions are based on the amount of money that is claimed and the filing status on the income tax returns. Those who are single can only have an income of $75,000. However, married couples who are filing jointly can have up to $150,000 to quality for this tax credit.

Determination of Income

So, how is the income determined to figure out if you meet the restrictions or not? Usually this is figured out just like the Adjusted Gross Income on the 1040 tax return. This can include salaries, interest, pension, rental income, and many other things. It is this Adjusted Gross Income that you’ll want to look out to make sure that you meet the income restrictions on the tax credit.

The Principal Residence

The tax credit is only available for those who are purchasing a principal residence. So, what exactly is a principal residence? Basically this is the home where a person ends up spending 50% or more of their time. It also may be called housing that is “owner occupied” as well. This includes condos, single family housing that is detached, townhouses, and co-ops. In some cases manufactured homes and even a few houseboats may quality under this definition as well.

Financing Restrictions

For the most part you’ll find that various types of financing are going to be acceptable when you are trying to claim this credit. There were some restrictions in 2008, but the one that was applicable then was removed in Congress. So, you don’t have to worry about financing restrictions keeping you from being able to claim this tax credit.

Do These Credits Have to Be Repaid?

While last year the tax credit eventually had to be repaid, in 2009 there is no repayment on the tax credits that are being given. This is excellent for new homeowners, since they won’t have to worry about paying back the government in the future.

How to Get the Credit

So, how do you get the new Homeowner Tax Credit? Well, there is nothing really special you need to do. Simply claim this on your 1040 tax return this year. The credit will be on a 5405 form that you will attach and you can easily get this form at the IRS website so that you can make the claim and get that tax credit.

Powered By WP Footer

Minnesota First Time Buyers Financing Options

Minnesota First time buyers financing options include- FHA, VA, conventional, special down payment assistance and bond funding

First time homebuyers in Minnesota may feel a little scared about whether or not they will be able to obtain the loan they need in order to secure the home of their dreams. Often times first time homebuyers are young couples who do not yet have a lot of work or credit history to look back upon. This makes them a risk according to many lenders, which can make it somewhat difficult for people to find the loans that they need to get the home they have been eyeing up for some time now. Since there are so many roadblocks up against first time homebuyers, one may think that they just do not stand a chance.

Luckily though there are a lot of program out there designed specifically with the first time homebuyers in mind. Such programs would include that of FHA, VA, special down payment assistance, bond funding, and conventional loans. These finance options are out there for the taking but you will want to take a special look at each one of them in order to make sure that you are going with the one that is right for you. Minnesota housing finance is something that scares a lot of people who have gone through the process before. As long as you are working with skilled professionals there should be no reason to be worried.

Those you are working with will know that you are a Minnesota first time homebuyer. You are looking at a vast majority of Twin cities homes and it is important to make sure that you are getting the best for your money. That is why some of the programs require the Minnesota home to pass their own criteria of home inspection qualifications. This is to protect the best interest of not just the lender but the customer as well. Since first time home buyers are new to the whole thing, they may need that little bit of extra guidance to make sure that everything goes smooth and that they are not ripped off.

The Minnesota housing finance that is the least popular for those who are first time homebuyers is that of the conventional loan. There are a lot of hoops to jump through and a lot of qualifications a buyer must meet in order to make the cut. Although conventional loans can offer great rates, that is not the only type of loan out there that can give you incredible rates. Since FHA and VA loans are designed to give people a break, they will generally offer incredible interest rates as this will help to make sure that the new buyers will have very little problems making their mortgage payments. In some cases, the interest rates given through an FHA or VA loan is better then what could be offered through a conventional loan.

If you are ready to buy a home but feel as though you do not have a lot of money for a down payment you could find help with that. Some people may not have any money at all for a down payment but that does not mean that there is not assistance for that out there. The government wants people to be homeowners and that is probably a big part of the reason as to why there are so many programs out there is help give down payment money. Generally, the down payment money is given from the program or the sellers of the property. It raises the principal balance by that amount of money. All it means is that you are paying the down payment money throughout the course of the loan instead of upfront, as this is the easiest way to look at it.

Bond money can also be an option if you qualify. There is a lot of money set aside out there for people who need help with down payment money. The key though is to make sure that you are really looking over all of your options in order to make sure that you are making the right decision for you and your family. There is nothing wrong with wanting to come up with the down payment money on your own, but if there is assistance out there for a Minnesota first time homebuyer then you should look into it. You could always use the money you have set aside for moving expenses or to do some minor repairs to the home once it is yours.

Make sure that you contact a realtor as soon as possible in order to review all of your options. As long as you are going with an experienced realtor, he or she should have no problem walking you through the process and providing you with all of the money you would need to check into a FHA or VA loan. Even if you qualify for the first one you look into, make sure that you are exploring all of your options. By not doing so, you could very well find yourself wasting hundreds, or even thousands, of dollars that you could have otherwise saved and put towards something else.

Powered By WP Footer