| Are you a First Time Buyer OR have not owned a home in the last 3 years? If so,a tax credit of up to $8,000 is available for qualified home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. This tax credit does not
have to be repaid.
Now, Extended and Expanded through April 1, 2010! - Home Buyer Tax Credit of 2010
The Housing and Economic Recovery Act of 2008 provides a new refundable tax credit for individuals who are qualified first-time homebuyers of a principal residence in the United States. In February 2009, the benefit was revised by the American Recovery and Reinvestment
Act - Click here to learn more | Also, see tax from 5404
New Legislation
New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law:
• Extends deadlines for purchasing and closing on a home.
• Authorizes the credit for long-time homeowners buying a replacement principal residence.
• Raises the income limitations for homeowners claiming the credit.
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their
2009 or 2010 return. Learn More...
For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period
during the eight-year period that ended on the date the replacement home is purchased. This is a great opportunity to review your position on moving. Learn More...
Are you or someone you know in the Military, Foreign Service or Intelligence Community?
Congress acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home
buyers. Those eligible may have extended benefits - click here.
Renting vs Buying
In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. The chart below shows a cost comparison for a renter and a homeowner
over a seven year period.
- The renter starts out paying $800 per month with annual increases of 5%
- The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
- After 6 years, the homeowner's payment is lower than the renter's monthly payment
- With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years
Years Rent Payment Mortgage Payment Monthly Difference After Tax Savings Yearly Difference After Tax Savings
Years |
Rent Payment |
Mortgage Payment |
Monthly Difference |
After Tax Savings |
Yearly Difference |
After Tax Savings |
| 1 |
800 |
1000 |
-200 |
-50 |
-2400 |
-600 |
| 2 |
840 |
1000 |
-160 |
-10 |
-1920 |
-120 |
| 3 |
882 |
1000 |
-118 |
+32 |
-1416 |
+384 |
| 4 |
926 |
1000 |
-74 |
+76 |
-888 |
+912 |
| 5 |
972 |
1000 |
-28 |
+122 |
-336 |
+1464 |
| 6 |
1021 |
1000 |
+21 |
+171 |
+252 |
+2052 |
| 7 |
1072 |
1000 |
+72 |
+222 |
+864 |
+2664 |
| 8-30 |
|
|
Savings increase every year |
Loan Programs Available for First-Time Buyers
First time home buyer loans allow buyers to get into a house more easily. However, just because you’re a first time home buyer doesn’t mean you should use a first
time home buyer loan. These programs have restrictions and strings attached. While they are a perfect fit for some, first time home buyer loans are the wrong choice for others.
A person’s first home purchase is a big deal. It takes time, energy, and money. To help with the money hurdle, some people use first time home buyer loans. These programs
vary depending on where they’re offered, but the general idea is this: first time home buyer loans give financial assistance to qualified borrowers. They may do this in
the following ways:
- Allow for a very low (or no) down payment
- Subsidize interest costs (they pay all or part of it)
- Offer grants
- Forgive loans
- Limit fees that lenders are allowed to charge
- Defer payments
Note that first time home buyer loans available to you might offer any or none of the benefits listed above. A good place to research first time home buyer loans available
in Michigan is the HUD Web site on home buying programs. Visit the HUD website for more FHA information and guidelines - HUD
website.
Who Gets First Time Home Buyer Loans?
As you might imagine, individuals who have never owned a home are good candidates. In addition, some programs offer first time home buyer loans to people who have not found a
home within the last three years. You may have to meet certain income restrictions to qualify for a subsidized first time home buyer loan. In general, these programs try to limit
benefits to people with low and moderate income levels. If you earn too much, you won’t qualify for the program. More on FHA.
FHA Loan Programs - Click Here |
HUD info for Michigan - Click
Here
How Much Can I Afford
There are a host of calculators available to assist you with determining how much home you can afford. check our mortgage calculator to see what feels comfortable to you. In
the end, your mortgage broker can best assist you with what you can afford by going over the loan process and expenses that lenders use to calculate loan determinations.
Helping to Make Your Dream a Reality!
Finding and buying a new home should be a rewarding experience. At CENTURY 21 Today, we know the search for your dream home is about more than just putting a roof over your head.
It's an expression of your hopes and dreams, your lifestyle and values. It's a place to spend time with family and friends, as well as your personal retreat at the end of your
day. CENTURY 21 Today has been helping people find their dream home since 1967. We are proud to be your real estate partner…wherever life leads you!
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