BBB Has Advice for Consumers Looking to Take Advantage of the Program
Austin TX Time is running out for first-time home buyers to take advantage of the up to $8000 tax credit set aside this year as part of the economic recovery effort. Barring a time extension consumers looking to cash in must purchase a home by November 30th 2009.
Considering it usually takes 30 days to close on a house now may be the time to act and Better Business Bureau offers guidance on how to benefit from the First-Time Home Buyers Tax Credit.
With low interest rates and this federal tax credit now is a great time to take advantage of the housing market" said Carrie A. Hurt President and CEO of BBB serving Central Coastal and Southwest Texas. However its important that first-time home buyers dont rush into buying a house just because of the tax credit. Consumers need to make sure they qualify for the tax credit and are able to make the mortgage payments."
The First-Time Home Buyers Tax credit was created this year to stimulate the real estate market by encouraging first-time home buyers. The tax credit is equal to 10 percent of the homes purchase price up to a maximum of $8000. Qualifying participants simply claim the credit on their Federal income tax return.
More than 1.4 million first-time home buyers have taken advantage of the tax credit so far this year according to the IRS. The National Association of Realtors predicts that the tax credit will result in an additional 350000 sales. There are six bills before Congress that would extend the tax credit at least until the end of 2009 but there is no guarantee that any will pass. According to CNN there has already been $14 billion allocated for the credit.
There are a few requirements for participation and BBB offers the following guidance on the First-Time Home buyers Tax Credit:
Dont Rush In. Just because the tax credit is set to expire November 30 doesnt mean you should rush into buying a house. In the long run taking the time to find the right house is more important than receiving a tax credit toward purchasing a house you might not like.
Defining First-Time Home Buyer. For the purposes of the tax credit a first-time home buyer is defined as an individual who hasnt owned a principal residence in the previous three years. Neither party in a married couple would qualify if either had owned a primary residence in the previous three years.
Income Requirements. In order to receive the maximum credit the modified adjusted gross income must be $75000 or less for a single buyer and $150000 or less for a joint couple. Single buyers earning between $75000 and $95000 and couples earning between $150000 and $170000 are eligible for a reduced credit.
Use the Tax Credit Now. The Secretary of Housing and Urban Development announced that buyers using FHA-insured mortgages can apply their anticipated tax credit immediately toward the purchase of a house. This is achieved through bridge loans by non-profits or an FHA-approved lender.
Prepare to Stay Awhile. Home buyers must remain in the house for three years or they must return the credit. There are exceptions including death or divorce.
For more advice on home buying visit
www.bbb.org or check out BBBs Insiders Guide to Success on Buying a Home available at bookstores nationwide and on Amazon.com.
