Clarifying the tax credit...up to $8000!
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Wednesday, March 18, 2009
Clarifying the tax credit - up to $8000!
Purchase a Home Now and Take Advantage of the New Tax Credit of up to $8,000
A benefit that makes your new home affordable
A tax credit is available for first-time homebuyers under the American Recovery and Reinvestment Act of 2009. If you buy a home between January 1, 2009 and November 30, 2009, you may be eligible to receive a tax credit for 10% of the purchase price of your home—up to $8,000. Program highlights include:
1. Any individual (and if married, their spouse) who has no ownership interest in a home during the last three years is eligible.
2. Full credit for single taxpayers with incomes up to $75,000 ($150,000 on a joint return); partial credit for incomes up to $95,000 ($170,000 joint return).
3. Available for the purchase of a single-family home that will be used as a principal residence. Moreover, if the new home you are purchasing is a mobile home or condo, and it is going to be your principal residence, you still qualify for the home buyer tax credit. Even building a home on a land (as opposed to purchasing a ready-made house) qualifies for the $8000 housing tax credit.
4. Homebuyers can reduce (or even eliminate) their income tax liability for the year of purchase by claiming the credit on their tax return.* (*Certain eligibility criteria must be met. homebuyers should consult their tax advisor for further details)
5. If the home is sold before three years, the first-time home buyer (who is now the seller) must pay the IRS the entire amount of the tax credit at closing.
A benefit that makes your new home affordable
A tax credit is available for first-time homebuyers under the American Recovery and Reinvestment Act of 2009. If you buy a home between January 1, 2009 and November 30, 2009, you may be eligible to receive a tax credit for 10% of the purchase price of your home—up to $8,000. Program highlights include:
1. Any individual (and if married, their spouse) who has no ownership interest in a home during the last three years is eligible.
2. Full credit for single taxpayers with incomes up to $75,000 ($150,000 on a joint return); partial credit for incomes up to $95,000 ($170,000 joint return).
3. Available for the purchase of a single-family home that will be used as a principal residence. Moreover, if the new home you are purchasing is a mobile home or condo, and it is going to be your principal residence, you still qualify for the home buyer tax credit. Even building a home on a land (as opposed to purchasing a ready-made house) qualifies for the $8000 housing tax credit.
4. Homebuyers can reduce (or even eliminate) their income tax liability for the year of purchase by claiming the credit on their tax return.* (*Certain eligibility criteria must be met. homebuyers should consult their tax advisor for further details)
5. If the home is sold before three years, the first-time home buyer (who is now the seller) must pay the IRS the entire amount of the tax credit at closing.
Tuesday, March 17, 2009
Tuesday, March 10, 2009
A CONSUMER GUIDE TO THE FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT
A CONSUMER GUIDE TO THE FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT As Modified in the American Recovery and Reinvestment Act February 2009
FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT: EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit:
The amount of the homebuyer federal income tax credit is the lesser of 10% of the cost of the home bought or $8,000.
Eligible Property:
Any single-family residence (including a condo, co-op, or townhouse) may be an eligible property under the homebuyer income tax credit, provided it will be used as the homebuyer’s principal residence.
Refundable:
This homebuyer income tax credit reduces income tax liability. The $8,000 tax credit is a clean refundable credit, unlike the one that was passed last summer, which required a repayment. If you qualify as a first-time buyer (i.e., haven't been a homeowner in the past 3 years), then you can claim the $8,000 to reduce your tax burden. If the $8,000 is greater than the tax you owe, then you will get a refund check for the difference. Example: you owe $2,000 in taxes on April 15, 2010. But if you bought a home before the stimulus expiration on Dec. 1, 2009, then you will get a tax refund check for $6,000 from the IRS.*
Income Limit:
In order to be eligible for the homebuyer income tax credit in full, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.
First-time Homebuyer Only:
The homebuyer income tax credit is designed for first-time homebuyers, which means the homebuyer (and/or the homebuyer’s spouse) can not have owned a principal residence in the 3 years prior to purchase of the eligible property.
Revenue Bond Financing:
A homebuyer who utilizes revenue bond financing may be eligible for the homebuyer income tax credit.
Repayment:
There is no repayment of the homebuyer income tax credit by the homebuyer.
Recapture:
However, if the eligible property is resold within three years of purchase, the entire amount of homebuyer income tax credit is recaptured on the sale.
Effective Date:
The First-Time Homebuyer Federal Income Tax Credit is effective for purchases on or after January 1, 2009 and before December 1, 2009. This guide reflects a modification from the First-Time Homebuyer Federal Income Tax Credit, which remains in effect for homes purchased by eligible homebuyers between April 9, 2008 and Dec. 31, 2008.
FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT: EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit:
The amount of the homebuyer federal income tax credit is the lesser of 10% of the cost of the home bought or $8,000.
Eligible Property:
Any single-family residence (including a condo, co-op, or townhouse) may be an eligible property under the homebuyer income tax credit, provided it will be used as the homebuyer’s principal residence.
Refundable:
This homebuyer income tax credit reduces income tax liability. The $8,000 tax credit is a clean refundable credit, unlike the one that was passed last summer, which required a repayment. If you qualify as a first-time buyer (i.e., haven't been a homeowner in the past 3 years), then you can claim the $8,000 to reduce your tax burden. If the $8,000 is greater than the tax you owe, then you will get a refund check for the difference. Example: you owe $2,000 in taxes on April 15, 2010. But if you bought a home before the stimulus expiration on Dec. 1, 2009, then you will get a tax refund check for $6,000 from the IRS.*
Income Limit:
In order to be eligible for the homebuyer income tax credit in full, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.
First-time Homebuyer Only:
The homebuyer income tax credit is designed for first-time homebuyers, which means the homebuyer (and/or the homebuyer’s spouse) can not have owned a principal residence in the 3 years prior to purchase of the eligible property.
Revenue Bond Financing:
A homebuyer who utilizes revenue bond financing may be eligible for the homebuyer income tax credit.
Repayment:
There is no repayment of the homebuyer income tax credit by the homebuyer.
Recapture:
However, if the eligible property is resold within three years of purchase, the entire amount of homebuyer income tax credit is recaptured on the sale.
Effective Date:
The First-Time Homebuyer Federal Income Tax Credit is effective for purchases on or after January 1, 2009 and before December 1, 2009. This guide reflects a modification from the First-Time Homebuyer Federal Income Tax Credit, which remains in effect for homes purchased by eligible homebuyers between April 9, 2008 and Dec. 31, 2008.
Monday, March 2, 2009
A Look at 30-Year Fixed Rate Mortgages Since 1971
We’ve all seen the headlines. “Rates on 30-year mortgages drop back below 6%.” “Lower rates help sell houses, but market faces broader ills.” “Mortgage Applications Surge with Large Drop in Rates in Latest MBA Weekly Survey.” But what do changes in rates really do for your personal purchasing power and how low is “low” when it comes to today’s rates? To answer these questions, we turned to the experts.
An historical perspective to give you a better perspective as to how low mortgage rates currently are, we turned to Freddie Mac, a shareholder-owned corporation developed by the United States Congress in 1970. The mission of the organization is to provide homeowners and renters with lower housing costs and better access to home financing. I can provide you with a chart which includes the monthly average commitment rate and points on 30-year fixed rate mortgages since 1971.
A few of the key highlights:
• As of January, 2009, we are averaging a 5.05 percent commitment rate on 30-year fixed rate mortgages
• To put it in perspective, in October 1981, interest rates reached their highest point, averaging 18.45 percent; more than three times today’s current rate
• Though rates eventually came down, they did remain at double digit numbers for most of the 1980s and into 1990 (nearly a decade)
• At today’s rate of around 5.05 percent, rates are the lowest they’ve been in Freddie Mac’s record which dates back to 1971
• Historically speaking, rates have moved relatively slow and consistent through the years though there have been some notable peaks. Among them:
o Since 2000, mortgage rates have remained relatively low with a peak of 8.52 percent in May 2000 to the January 2009 low of 5.05 percent
o But to put it into perspective of how fast things can change, in January 1979, rates were at 10.39 percent. Just over two years later, rates reached their peak of 18.45 percent in October 1981. During this period, rates rose dramatically, and at one point jumped almost two percentage points in just 30 days.
The bottom line is that with interest rates remaining at historic lows, this increases an individual’s purchasing power and makes the mortgage payment more manageable. All of this is leading up to a very strong market for buyers.
An historical perspective to give you a better perspective as to how low mortgage rates currently are, we turned to Freddie Mac, a shareholder-owned corporation developed by the United States Congress in 1970. The mission of the organization is to provide homeowners and renters with lower housing costs and better access to home financing. I can provide you with a chart which includes the monthly average commitment rate and points on 30-year fixed rate mortgages since 1971.
A few of the key highlights:
• As of January, 2009, we are averaging a 5.05 percent commitment rate on 30-year fixed rate mortgages
• To put it in perspective, in October 1981, interest rates reached their highest point, averaging 18.45 percent; more than three times today’s current rate
• Though rates eventually came down, they did remain at double digit numbers for most of the 1980s and into 1990 (nearly a decade)
• At today’s rate of around 5.05 percent, rates are the lowest they’ve been in Freddie Mac’s record which dates back to 1971
• Historically speaking, rates have moved relatively slow and consistent through the years though there have been some notable peaks. Among them:
o Since 2000, mortgage rates have remained relatively low with a peak of 8.52 percent in May 2000 to the January 2009 low of 5.05 percent
o But to put it into perspective of how fast things can change, in January 1979, rates were at 10.39 percent. Just over two years later, rates reached their peak of 18.45 percent in October 1981. During this period, rates rose dramatically, and at one point jumped almost two percentage points in just 30 days.
The bottom line is that with interest rates remaining at historic lows, this increases an individual’s purchasing power and makes the mortgage payment more manageable. All of this is leading up to a very strong market for buyers.
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