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Don't Miss Out on the Federal Home Buyer Tax Credit - The Clock is Ticking!
Posted by Connie Sithens on Monday, March 15th, 2010 at 3:32pm.It's never too late to buy a new home. Several factors are converging to make this the perfect time to buy a home. Interest rates are at historic lows. Inventory levels are high which means there are plenty of choices for buyers at good prices. And Uncle Sam is offering a 10% tax credit up to maximum of $8,000, for first time or other eligible buyers who have not owned a home in the three years previous to the purchase. Why pay the mortgage on your landlord's property when you can be accumulating equity in the property yourself?
I just want to share a couple of stories of folks who have recently purchased a home and taken advantage of the tax credit.
I received a call from a young woman in her twenties, who was interested in renting a one-bedromm apartment for $500 per month. When I asked if she had considered purchasing a home, she replied that she would love to do that, but she and her husband did not use credit cards and they did not have a credit history. I suggested that the young woman call a local lender who is very good at working with first time buyers and would work with them to document alternative forms of credit. What this means is even if you have never borrowed to purchase a car or even had a credit card, you probably have a cell phone account and have paid for car insurance and utilities for two or more years. These types of regular payments can be used by a lender to document alternative forms of credit. This young couple bought a totally renovated three-bedroom one-bath home for $72,000. Their mortgage payment is under $600 per month and they will be receiving a tax credit of $7,200.
Another woman called who was looking for affordable housing for her mother who was in her mid-nineties. The mother had been renting in New Bern for six years, since she sold her residence in another state. Over the years the mother's rent had gradually increasesd and it was approaching $1,000 per month plus utilities. To complicate matters she had enough antique furniture for a three-bedroom home and for sentimental reasons, she did not want to part with any of it. A local lender qualified the ninety-five year old woman for a fixed rate FHA loan which requires a 3.5% down-payment. We found an 1800 square foot mobile home on a permanent foundation for $73,000, and we negotiated for the Seller to pay most of the closing costs. Her mortgage payment is under $600 per month and she has room for all of her antiques! Because she is on social security and her income is such that she does not pay any taxes, she will recieve a refund check from the IRS of $7,300 when she files her tax return.
There is a tax credit of up to $6,500 available for those who have owned a home in the last three years. This credit is provided to eligible buyers who have owned and used the same principal residence for any five consecutive years during the previous eight year period prior to the purchase of a new principal residence. This credit provides an incentive to move-up buyers, those who are downsizing, or simply relocating to another area or buying a second home.
To take advantage of this credit opportunity, you must have the home selected and under contract by April 30, 2010 and you must close on the home by June 30, 2010. If you would like to pursue this dream, please give me a call at 252-474-4054. Let's get stared!
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